Historically, books and periodicals have never been subject to tax in the UK, and when we joined the EEC in 1973 it was agreed that these items could be zero-rated for VAT. However, loo paper is a consumable item and subject to VAT at the full rate. It's not unfair because everyone pays the same tax.
Surprisingly, yes! Bottled water is subject to VAT as it's not considered a basic necessity since tap water is available. Milk is generally not subject to VAT and is zero-rated for VAT purposes. Flavoured milk, such as chocolate or strawberry milk, may be subject to standard-rated VAT.
On the other hand, everyday items also bought at a supermarket which are likely to be considered as essential items, such as toothpaste or toilet paper, are not charged at the same lower rate of VAT as food items.
Historically, books and periodicals have never been subject to tax in the UK, and when we joined the EEC in 1973 it was agreed that these items could be zero-rated for VAT. However, loo paper is a consumable item and subject to VAT at the full rate. It's not unfair because everyone pays the same tax.
However, for some items the standard VAT rate will apply. These include food and drink supplied by the catering industry, alcoholic drinks, confectionery, crisps, savoury snacks, hot food, sports drinks, hot takeaways, ice cream, soft drinks and mineral water.
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.
You must standard rate your supplies of any product designed to be eaten while frozen. Products which are supplied frozen, but have to be cooked before they can be eaten, or which have to be thawed completely before eating, are zero-rated.
VAT is also charged on other items of "sweetened and prepared food which is normally eaten with the fingers." For example: Chocolate bars. Diabetic chocolate. Liqueur chocolates.
Item 4 of the items overriding the exceptions applies the zero-rate to all varieties of leaf tea, powdered instant tea, and tea bags, but not to soft drinks containing tea, which are generally fruit-flavoured, containing tea as one of many ingredients, and compete in the same market as other soft drinks.
Greggs bakes fresh daily, without retaining heat or marketing products as hot, to avoid VAT and keep prices lower. Hot sandwiches in heated cabinets are subject to VAT.
If the sausage rolls and bakes were kept hot after they had been baked, then they would be subject to VAT and the customer would have to be charged a higher price, in the same way that we charge VAT on our hot sandwiches which are kept in a heated cabinet and are subject to VAT.
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.
When it comes to VAT for home cooking and baking items in the UK, most basic ingredients used for cooking and baking are zero-rated for VAT. This means that items like flour, sugar, eggs, butter, and spices are exempt from VAT. However, there are exceptions to this rule.
Cold takeaway food and drinks are usually zero-rated VAT, with some exceptions like alcoholic drinks, confectionery, crisps, sports drinks, ice cream, soft drinks and mineral water. Food that's served hot is always standard rate VAT. If cold food is eaten on the premise of a restaurant or pub its standard rate VAT.
If it is supplied for consumption on the premises on which it is supplied it will be standard-rated. Secondly, you must decide if the supply is in the course of catering per se. If, after consideration of the factors involved, it is not a supply of catering then the cold take-away food will be zero-rated.
Most food is zero-rated for VAT, so you don't pay VAT, but some items are standard-rated (20% VAT). This includes catering, alcoholic drinks, confectionery, crisps and savoury snacks, hot food, sports drinks, hot takeaways, ice cream, soft drinks and mineral water.
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.
A TV Licence is exempt from Value Added Tax (VAT). Therefore the price of a TV Licence will not be affected by any increases or decreases to the VAT rate. Find out more about ways to pay for your TV Licence.
Under UK law, VAT on cakes and biscuits is set at 0%. However, crucially, the law states that if a biscuit is partly or wholly covered in chocolate then it is to be taxed at the standard rate.
