Is there VAT on hot takeaway food?

Cold takeaway food and drink is zero-rated, as long as it’s not of a type that’s always standard-rated (such as potato crisps, sweets and some beverages including bottled water). Hot takeaway drinks are standard-rated (or temporarily reduced rated as long as they are non-alcoholic).

What is the current VAT rate on takeaway food?

5%
From today (15th July) the rate of VAT on eat-in or hot takeaway food has been cut from 20% to 5% until 12th January 2021.

Does VAT reduction apply to takeaway?

Takeaway: If it is hot food or a hot drink being sold, and it is not alcoholic, it is subject to 5% VAT – otherwise the 20% rate will apply.

Do you pay tax on hot food?

Under long-standing VAT legislation, sale of most foods bought to eat or cook at home is zero-rated for VAT, meaning that no tax is charged. By contrast, meals bought and consumed in a restaurant, and hot take-away food or drink, are charged at a standard 20% tax rate.

Is takeaway 5% food?

A 5% rate of VAT applies to supplies of: Food and non-alcoholic beverages sold for on-premises consumption, for example, in restaurants, cafes and pubs. Hot takeaway food and hot takeaway non-alcoholic beverages.

Why is takeaway cheaper than eat in?

Although “hot food” is charged the same whether it is “eat in” or takeaway as both are subject to VAT, the reason for the additional charge for “eating in” is to cover the cost of cleaning up after the consumer has finished.

What is the current VAT rate during Covid?

The Chancellor of the Exchequer announced on 24 September 2020 that the temporary reduced rate for tourism and hospitality will be extended to 31 March 2021. This cut in the VAT rate from the standard rate of 20% will have effect from 15 July 2020 to 31 March 2021.

Is there VAT on takeaway pizza?

The purpose of the legislation is to ensure that hot takeaway food is always subject to VAT and cold takeaway food gets zero-rating unless it is a specifically excepted item such as an ice-cream or a chocolate bar. The guidance given in notice 709/1 is very clear and conclusive in most cases, particularly about pizzas!

What items are reduced rate VAT?

Cold takeaway food continues to be subject to VAT at 20% or 0% under the existing rules. hot takeaway food and hot takeaway non-alcoholic drinks. sleeping accommodation such as hotels and similar establishments, holiday accommodation, caravan and tent pitch fees and associated families.