VAT on Food in the UK: Standard & Zero-Rated VAT Items

12/06/2021 - 9 minutes read

Are you a VAT registered business looking to figure how VAT is applicable on your food items? Read on to find out more about applicable rates of VAT on food items.

VAT on Food in the UK: Standard & Zero-Rated VAT Items

VAT on Food in the UK: Standard & Zero-Rated VAT Items

Zero-rated VAT on food items

  • – Raw meats and fish
  • – Vegetables and fruit
  • – Cereals, nuts, and pulses
  • – Culinary herbs

Whether you supply these unprocessed foodstuffs direct to the public or for use as ingredients in the manufacture of processed food, they must be fit for human consumption.

Here’s a useful summary for VAT on food items:

Food Item Rate of VAT Notes
Meat and poultry, for example Zero rate Butchered or complete carcass
beef, lamb, pork, chicken etc.
Exotic meat, for example, Zero rate Butchered or complete carcass
horse, ostrich, crocodile,
kangaroo, and so on
Fish Zero rate If fit for human consumption
Vegetables and fruit Zero rate If of a quality fit for human consumption
Culinary herbs and spices Zero rate See VAT Notice 701/38: seeds and plants
Ornamental vegetables Standard Rate For example, cabbages, that are
grown for their appearance
rather than consumption
Juice and juice concentrates Standard Rate see paragraph 2.2
Nuts and pulses Zero rate If raw and unprocessed for
human consumption
VAT on Food Items

VAT on Food Items

VAT on home cooking and baking items

You can use zero rates for products sold for use as an ingredient in home cooking or baking:

Food Item Rate of VAT Notes
Prepared cake, sauce, soup, and other mixes Zero rate For use as an ingredient in the home kitchen
Mixes for ice cream and similar frozen products Standard rate See paragraph 3.5
Sweeteners Zero rate Including natural products like honey and sugar,
and artificial products like saccharin

VAT on food supplied in the course of catering

You must always standard rate food supplied in the course of catering (subject to the rules on the temporary 5% reduced rate of VAT that will apply between 15 July 2020 and 31 March 2021) including hot take-away food.

Further information can be found in VAT Notice 709/1: catering and take-away food.

VAT on food not supplied in the course of catering

Most food of a kind used for human consumption (see paragraph 2.3) is zero-rated. There are, however, some exceptions as follows:

You must always standard rate But you can zero rate
Ice cream, similar products, and mixes for making them – see paragraph 3.5 Frozen yoghurt that’s designed to be thawed before being eaten
Confectionery, apart from cakes and some biscuits – see paragraph 3.6 Drained cherries and candied peel
Alcoholic beverages – see paragraph 3.7
Other beverages, and preparations for making them – see paragraph 3.7 Milk and milk drinks, tea, maté, herbal tea, coffee and cocoa, preparations of yeast, meat and egg
Potato crisps, roasted or salted nuts and some other savoury snack products – see paragraph 3.8
Products for home brewing and winemaking see paragraph 3.7

How these criteria apply to general and specialised food products is explained in section 3 and section 4.

VAT on biscuits

Biscuits covered or partly covered in chocolate or some other products similar in taste and appearance to chocolate are standard rated.

Examples to help determine whether a product is zero or standard-rated:

Zero-rated Standard rated
Chocolate chip biscuits where the chips are either included in the dough or pressed into the surface before baking All wholly or partly coated biscuits including biscuits decorated in a pattern with chocolate or some similar product
Bourbon and other biscuits where the chocolate or similar product forms a sandwich layer between 2 biscuit halves and is not continued onto the outer surface Chocolate covered shortbread
Jaffa cakes Gingerbread men decorated with chocolate unless this amounts to no more than a couple of dots for eyes
Biscuits coated with caramel or some other product that do not resemble chocolate in taste and appearance Ice cream wafers partly covered in chocolate such as ‘chocolate oysters’

VAT on hot food

Many bakery products, particularly bread, pies, pasties and other savouries, are baked on the retail premises and are sold whilst still hot. The borderline between ‘freshly baked’ and ‘hot take-away’ food can be a difficult one, and if you sell any hot food you’re advised to read VAT Notice 709/1: catering and take-away food which sets out the distinction in more detail. If you’re still in any doubt contact the VAT: general enquiries helpline.

VAT on confectionery

Standard-rated confectionery includes chocolates, sweets and candies, chocolate biscuits and any other ‘items of sweetened prepared food which is normally eaten with the fingers. Items of sweetened prepared food do not need to have added sweetening if they are inherently sweet, for example, certain fruit and cereal bar products.

Here are some examples of the standard and zero-rated confectionery:

Zero-rated VAT on Food Items Standard rated VAT on Food Items
Cakes including sponge cakes, pastries, eclairs, meringues, flapjacks, lebkuchen, marshmallow teacakes and Scottish snowballs Chocolates, bars of chocolate including those containing nuts, fruit, toffee, or any other ingredients, diabetic chocolate, liqueur chocolates and similar sweets
Chocolate spread, liquid chocolate icing, chocolate couverture, and chocolate chips, strands, vermicelli, mini-buttons etc held out for sale solely for culinary use; chocolate body paint Sweets, pastilles, gums, lollipops, candy floss, sherbet, chewing gum, bubble gum, Turkish delight, marshmallow, fondants and similar confectionery
Biscuits coated with icing, caramel or some other product different in taste and appearance from chocolate Compressed fruit bars and other items of prepared dried fruit confectionery that are sweet to the taste
Chocolate cups Sweetened popcorn
Toffee apples and other apples on a stick covered in chocolate, nuts and so on Nuts or fruit with a coating, for example of chocolate, yoghurt or sugar
Ginger preserved in syrup drained ginger or dusted ginger can be zero-rated as long as it’s not held out for sale as confectionery Crystallised, sugared or chocolate-covered ginger
Candied peels, angelica, drained cherries for use in home baking often described as ‘glacé’ cherries and cocktail or maraschino cherries Drained, glacé or crystallised fruits including Petha, Marrons glacés
Halva (unless coated with chocolate or chocolate substitute or held out for sale as confectionery) Bars consisting mainly of seeds and sugar or other sweetening matter
Edible cake decorations Cereal bars, whether or not coated with chocolate, with the exception of bars that qualify as cakes
Sweet tasting dried fruit held out for sale as snacking and home baking Sweet tasting dried fruit held out for sale as confectionery, snacking
Traditional Indian and Pakistani delicacies such as barfis, halvas, jelabi, laddoos; and traditional Japanese delicacies Slimmers’ meal replacements in biscuit form that are wholly or partly covered in chocolate or something similar in taste and appearance

 

Need help with VAT on Food Items?

Contact MCL Accountants on 01702 593 029 to optimise your tax position or if you need any assistance with your VAT returns if you are unsure about VAT on Food items.

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