VAT on cold takeaway canteen food

[Willzzz]

My work canteen have recently moved to an electronic payment system (as opposed to cash) and in doing so have started charging VAT on all products including cold takeaway food.

I have challenged them on this and they say VAT is liable as it is a 'service'. Can this be true? What service are they providing? Surely they are just creating a product and then selling it to me? If they create a zero rated product then it is zero rated.

Anyone happen to know about this sort of thing?

[peterb]

Everything you need to know (in excruciating detail)

http://customs.hmrc.gov.uk/channelsP...HMCE_CL_000160

And if that doesn't answer the question, contact the HMRC VAT helpline.

As with most tax questions, the devil is in the detail.

[CAT-THE-FIFTH]

As with most tax questions, the devil is in the accountant.

[davesom555]

I found this - read the bit about takeaway food to be eaten hot... don't know if this applies though.

http://www.bbc.co.uk/news/uk-politics-18244640

[scaryjim]

Do you sit in the canteen to eat it?

If so it's eat-in, not takeaway, and most products will be liable to VAT. Potentially they're also not licensed as a takeaway, in which case they may have no choice but to charge VAT.

VAT law surrounding foodstuffs is weird; I used to have a mate who ran a cafe and catering business, and if he took plates of sandwiches to someone's event it was external catering and VATable, but if they came and collected the same plates of sandwiches from his shop it was takeaway and hence non-VATable.

[Willzzz]

I have of course read the HMRC website (and phoned the helpline), and it seems pretty clear that this should be zero-rated. However the canteen disagrees, what steps can I take to resolve the situation?

[jimbouk]

Provide them with something in writing saying that you have consulted with HMRC (time and date of phone call and name of person you spoke to) and this is what they said, and ask for a written response from them. Not very friendly but if they're not playing ball then you don't have many options but to go 'formal'.

[Saracen]

I have of course read the HMRC website (and phoned the helpline), and it seems pretty clear that this should be zero-rated. However the canteen disagrees, what steps can I take to resolve the situation?

What did HMRC say?

My opinion (and it's something of a lay opinion) is that I don't have quite enough information to form an opinion.

But here's a little tale for you. Years ago, I had an argument with a certain well-known high street bookseller about VAT on a book that included a software disc. I maintained that there was VAT, on the software element of the book, and that as such, and as I am a VAT-registered business, I require a VAT receipt to be able to reclaim it.

The store assistant refused, despite my pointing out that they were legally obliged to provide such a receipt, detailing the VAT, if I asked for it. It wasn't optional, but a legal necessity. The manager was called over, and also refused, point blank. By now, I was getting annoyed. It was only a matter of about a pound, maybe less.

So, on getting back to my office, I rang the bookshop's head office. They refused, outright. Told me they didn't have the data. I recorded that conversation.

So then, I called HMRC and asked to have a word with whoever was responsible for that retailer's VAT, as they were point-blank refusing to honour their VAT obligations. I ended up chatting to a very nice chap, whose job title was something akin to "account director" for the group of companies the bookshop was part of. I told him the story, and pointed out that, first, I wanted my (admittedly trivial) amount of VAT back, and b), the bookseller claimed they "didn't have the information" ... so how the hell did they know how much VAT to charge? And how many other people were being treated similarly illegally?

I also happened to mention, entirely in passing, that I'd been invited to dinner with his boss the next week. He thought I meant the head of HMRC (or HM C&E as it was then). I pointed out, no, I meant the Chancellor of the Exchequer. And it was true, by the way.

Whether that had any relevance or not, I don't know. I do know that within about an hour of that call, I had the company's head office ringing me, apologising for the mistake and informing me that a cheque would be in the post that day. It was, too.

So, if you want to push this, I'd suggest, first, do everything you can to confirm you are correct. That may include a very careful conversation with HMRC, or better yet, a written query, outlining the exact circumstances, because they may be critical. Then, if you're happy you are right, take it up, carefully and mildly, with the company management. If necessary, produce HMRC's advice to you that you are right. And if you still get nowhere, decide if you really want to go head to head with your employer over this. If so, a formal complaint to HMRC that a company is illegally charging you VAT on supplies that should be zero-rated. Be aware, if you do, you may well get "troublemaker" marked on your work file, and it may put paid to advancement, job opportunities etc and may even result in a careful and guarded change to any references you get from them in the future.

In other words, even if you are right, given it's your employer, do you really want to go to war over this? You may end up winning the battle and losing the war.

[Smudger]

My knowledge is only Greggs-based, but the rule seems to be if you're eating in, or they specifically heat something for you, VAT is payable. Waiting for hot stuff to come out of the oven is OK, but even then, they're supposed to sell you what's already out first. But then, who wants cold sausage rolls?

[Saracen]

My knowledge is only Greggs-based, but the rule seems to be if you're eating in, or they specifically heat something for you, VAT is payable. Waiting for hot stuff to come out of the oven is OK, but even then, they're supposed to sell you what's already out first. But then, who wants cold sausage rolls?

That's part of the rules, but there's a LOT more to it than that.

[Lucio]

Personally, I hate VAT and all the complex legislation that goes with it. For example, right now you can't charge a price ending in 99p and still collect the correct VAT if you follow the HMRC guidelines for VAT calculation.

[manfredbaumann]

VAT on cold takeaway canteen food was a great initiative....

<link removed>

[peterb]

VAT on cold takeaway canteen food was a great initiative....

<link removed>

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