Coffee purchased, as a hot drink, from a café, restaurant or similar establishment, is subject to VAT at the standard rate of 20%. Whether the coffee is consumed on the premises or taken away does not affect the VAT treatment. In the same way, VAT is charged on hot coffee purchased from takeaways/street vendors.
There are no specific tax exemptions for VAT on drinks. Instead, there are zero-rated items that fall within the VAT scheme but have a 0% VAT charge like tea bags and coffee beans. This means you can reclaim any VAT paid on those items for your business but won't have to charge VAT when you sell it on.
One of the most common business entertainment expenses, on which you cannot claim back VAT is client entertainment costs. This includes the cost of entertaining clients, suppliers, or customers, such as the free provision of meals, drinks, or tickets to events.
What foods are VAT zero-rated? All unprocessed foods for human consumption, including raw meat and fish, fruit and vegetables, cereals, nuts, pulses and culinary herbs are zero-rated.
All hot takeway food and most drinks continue to be subject to VAT at 20%, but some cold takeaway food can be zero-rated for VAT. This includes sandwiches and cake, and also pasties and other cooked pastry products as long as they aren't advertised as being hot and are not kept warm after they have been cooked.
In a business context, subsistence expenses refer to expenses incurred by an employee for food, drink, and accommodation away from the normal place of work. VAT can be reclaimed on subsistence expenses if the business pays the actual cost of the expense.
Hi. The sale of tea is generally a zero rated supply but but this does not include soft drinks containing tea as only one of several ingredients. Bubble teas normally start with a preperation of tea and then various other ingredients are added,for example fruit juices and other flavourings.
In a nutshell restaurants must always charge VAT on everything except food that is cold and taken away, takeaway vendors do not need to charge VAT unless the food is hot and/or the customer would like to eat in perhaps a designated sitting area.
In a business context, subsistence expenses refer to expenses incurred by an employee for food, drink, and accommodation away from the normal place of work. VAT can be reclaimed on subsistence expenses if the business pays the actual cost of the expense.
What foods are VAT zero-rated? All unprocessed foods for human consumption, including raw meat and fish, fruit and vegetables, cereals, nuts, pulses and culinary herbs are zero-rated.
Although most traditional bakery products, such as bread, biscuits and cakes, are zero-rated, some confectionery is standard-rated including: biscuits wholly or partly covered in chocolate (or some product similar in taste and appearance)
Food and drink for human consumption are often zero rated when supplied by a retailer. But food and drink are usually standard rated for VAT when provided as part of a catering service. Meals and drinks served hot or consumed in a cafe or restaurant are often standard rated.
You can't claim a VAT refund on restaurant bills, just as a Brit can't reclaim GST on restaurant bills incurred in the US. You may be able to claim a VAT refund on expenses to a non-EU business for business lunches/dinners where the purpose of the meeting and the identity of the participants are documented. Good luck!
All hot takeway food and most drinks continue to be subject to VAT at 20%, but some cold takeaway food can be zero-rated for VAT. This includes sandwiches and cake, and also pasties and other cooked pastry products as long as they aren't advertised as being hot and are not kept warm after they have been cooked.
For example, most cold drinks are standard-rated, but HMRC specifies that takeaway iced coffee, iced tea, and milkshakes are zero-rated (though ice cream, which many milkshakes contain, isn't). Similarly, certain cakes and desserts are zero-rated, as are vegetable-based snacks.
Any Café with any area set aside for the consumption of food by customers, supplying food or drink to be consumed in the Café, or any additional food consumption area (for example chairs on the pavement outside your café), will have to pay the Standard Rate of VAT on the food and drink sold for that purpose.
Normal and necessary packaging is treated as part of the goods which it contains. If the contents are zero rated, the packaging is zero rated. For example, a tin of baked beans, or a jar of marmalade.
Condiments and seasonings such as mustard, pepper, pickles, sauces, horseradish, vinegar, and salad oils, commonly added to food to make it more palatable, are zero-rated.
Like we said, all food which is consumed where it is served, whether it be cooked, uncooked, hot or cold, is subject to standard rate VAT charges. All food which is taken away is subject to zero-rate VAT charges, unless, it is cooked and served immediately.
This month, the cost of your favourite McDonald's meal has gotten considerably cheaper, as VAT was slashed from 20% to just 5%. The VAT cut means that some of your favourite menu items are cheaper than ever before.
HMRC advice seems contradictory and there is variation between the big names and smaller retailers - some are zero rated, others standard rated! These are doughnuts with various toppings - like the Krispy Kreme ones - toppings can be things like biscuits, sweets, icing etc.
