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Newsletter - Winter 2012

Food for thought

The furore surrounding the 'pasty tax' and the subsequent U turn by the Chancellor was covered in detail by the media so where exactly are we now?

Cold takeaway food is zero rated and hot takeaway food is liable to the standard rate of 20% VAT. However, the definition of 'hot food' on which 20% should be charged has altered from 1 October 2012. Hot food means where it is:

provided hot for the purposes of allowing it to be eaten hot (the old rule)
cooked, heated or reheated to order for example toasted sandwiches
kept hot, or where the natural cooling process is delayed for example where a business keeps food in hot cabinets, hot plates under heat lamps, etc. or where heat is applied in order to slow the cooking process. This means that cornish pasties and sausage rolls would therefore continue to be zero rated when they are cooling naturally in the racks but not when they are stored in heated cabinets
provided in heat retaining packaging or other packaging specifically designed for hot food for example foil lined takeaway packaging
advertised, marketed or promoted in any way that indicates that it is supplied hot.

If you would like any further information on this or other VAT changes which may affect your business please contact us.

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