VAT in the Food and Drink Industry
If you're managing a hospitality business, the VAT rules can sometimes appear confusing. JOSH SMITHURST from our accounts department serves up some simple rules to remember.
The food and drink industry is vast and encompasses a range of businesses which may subject to different VAT rules.
Firstly, we have restaurants and cafés that serve food and drinks to 'eat in'. If any food or drink is sold to be consumed, either on the premises or in a communal area which is provided for the customer to use, then all goods are subject to VAT at a standard rate of 20%. This applies to all goods, whether we're talking about hot or cold food, or soft and alcoholic drinks.
Secondly, we have cafés to 'take out' and other takeaways. If the food or drink does not fall under the following categories, then it is more likely to be zero rated. Also, once the produce is taken away, it must not be consumed in a communal area provided by the business.
- Savoury snacks
- Crisps
- Hot food
- Sports drinks
- Alcoholic drinks
- Ice cream
- Soft drinks
- Mineral water.
The next area of the industry is pubs, bars, and clubs. Now, as most of their income will be made from selling consumables to consume on the business premises, these will all be subject to VAT at the standard rate of 20%.
This has been a brief introduction to VAT in the food and drink industry. If you would like to know more about what has been discussed, please do get in touch. Call 0115 955 5500 or email enquiries@pagekirk.co.uk.