“VAT for “Caterers”
Although the supply of most food and drink of a kind used for human consumption is zero-rated, there are exceptions. Before we understand how VAT does impact different food related business it is important to understand the definition of “catering” being; “the supply of prepared food and drink”.
Examples businesses that generally meet this definition are:
- Restaurants and cafes (except the supply of cold take-away food)
- Events caterers (such as wedding receptions, parties or conferences)
- Delivery of cooked ready-to-eat food or meals
Examples of businesses that are NOT in the course of catering:
- Supplying cold take-away food
- Supplying groceries
- Supplying food that requires significant further preparation by the customer
If you meet the definition of a caterer then you are required to apply a standard rate of VAT on the supplies applicable.
They are the rules, but in reality knowing what supplies are standard rated and zero rated for VAT is complicated. Take for example take-away businesses; it is common that this type of caterer will supply both hot and cold food.
To that end if you would like to learn more about how VAT affects your business please get in touch.
Alternatively please view this link for further guidance.