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27th September 2013

VAT and Cafés

Filed Under: VAT

Recently I went to a Café to pick up a toasted Panini that I had ordered.  When paying for the Panini I was charged less than the advertised menu price, I was told it was because I was taking the Panini away to eat.  I later calculated how much of a discount I had been given and it equated to an amount equal to the VAT that would have been payable.  This could have been a coincidence but I do wonder if the Café had in fact not charged VAT on my lunch when in fact they should have.

It is easy to understand how the Café could have charged the wrong amount of VAT, the VAT rules around food can be quite complicated.  As a general rule anything that is supplied ‘hot’ (above ambient temperature) should be subject to VAT at the standard rate of 20%.  A lot of cold food supplied for takeaway can be zero-rated, effectively meaning no VAT is actually charged, although there are lots of exceptions to this rule.

I wonder how many Cafés and takeaway establishments there are that don’t totally understand the VAT rules and could be missing opportunities, or potentially not paying the VAT they should be.

Dan Hobbs
01903 300230

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