VAT on food sales: is it standard or zero rated?

If you are not a VAT registered business, then you do not need to worry about charging VAT. 

Food for human consumption is generally zero-rated for VAT, however there are various exceptions to be aware of. Read our guide to understand when there could be a discrepancy and when you should seek professional advice. 

VAT on confectionery 

There are specific cases where confectionery items have been treated differently for VAT, here are some examples and highlights from VAT tribunals. 

• Jaffa cakes – cakes, although HMRC tried to declare them a biscuit, so they are zero-rated. 
• Mega marshmallows – while the courts are still debating this, currently it seems that mega marshmallows are an ingredient, not confectionery, so they are zero-rated. This is because they are intended for roasting not eating out of the bag.
• Walkers poppadoms – standard rated as they are potato snacks. 
• Organix and Nakd bars – even though they are marketed as ‘healthy’ food items, they are confectionery and standard rated 
• Teacakes – these have been agreed to be a cake and therefore zero-rated 
• Pringles – they are standard rated, as they are a potato snack 
• McVitie’s Blissfuls – there was an argument as to whether the biscuits are wholly or partly covered with chocolate or filled with chocolate. It was deemed they are covered and therefore standard rated 

Other items that are specifically standard rated for VAT include: 

• Biscuits wholly or partly covered with chocolate 
• Alcoholic drinks, soft drinks, mineral water and sports drinks 
• Potato crisps and some savoury snacks 
• Ice-cream 
• Catering supplies 
• Roasted or salted nuts 

Items that are specifically zero-rated for VAT include: 

• Mousses, gateaux and Baked Alaska 
• Cakes 
• Chocolate spread 
• Iced coffee and milkshakes 
• Vegetable based snacks and crisps 
• Most unprocessed food (raw meat, fruit and vegetables) 
• Most ingredients for home cooking and baking 
• Unshelled nuts 

 

Are you a caterer? 

HMRC defines catering as “Catering in its ordinary meaning includes the supply of prepared food and drink. It is characterised by a supply involving a significant element of service.” 

If you are catering for weddings, delivering ready to eat meals, delivering packed lunches for meeting then this is all considered catering, and you must charge 20% VAT. 

If you are supplying food and drink to customer that requires them to cook or heat up, including takeaway food, then the VAT treatment is not so simple. 

Is it to eat-in or takeaway? 

When you purchase food from a café and they ask if you are eating in or taking away there’s a couple of reason for this question. 

• They can package your food correctly – a plate or mug or a takeaway box/cup 
• To get the VAT treatment correct 
  • eating in then you should charge 20% VAT. 
  • taking away then there are further rules to consider for VAT. 

Standard-rated takeaway food 

If the food itself is standard rated then you should charge 20% VAT. 

Regardless of the VAT rate, you must charge 20% VAT on all hot takeaways and home deliveries. This includes food that is heated to order and where you have kept it hot after cooking. 

Zero-rated takeaway food 

If the food is zero-rated and is provided to the customer cold, a zero-rated VAT charge applies. 

Food eaten in 

Where customers eat the food on your premises or in a designated seating area, you will have to charge VAT at standard rate.  

How we can help 

If you need help with your bookkeeping, VAT, accounts and tax get in touch. Call our friendly team on 01753 971 440 or use our online contact form. 

 

Last updated 12 Feb 2025 | First published 12 Feb 2025

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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