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HMRC internal manual

VAT Food

History since the introduction of VAT

1st April 1974

Confectionery, ice-cream, soft drinks, crisps and nuts were specifically excluded from group 1 when Parliament approved the 1972 Finance Act. Effectively this meant that when the tax was introduced all supplies of food other than pet food, alcoholic drinks and supplies in the course of catering were zero-rated. This decision was short-lived and reversed in the budget of 1974. Excepted Items 1, 2, 4 and 5 were introduced.

1st March 1976

Yoghurt unsuitable for immediate consumption when frozen became zero-rated. Item 1 of Items overriding the exceptions introduced.

1st April 1977

Foodstuffs used for domestic brewing or wine-making became standard-rated. Excepted item 7 introduced.

1st May 1984

Hot take-away food became standard-rated. Note (3) amended to expand the coverage of catering.

1st May 1988

The wording of excepted item 2 together with Note (5) was changed to include cereal bars within the definition of confectionery as any item of sweetened prepared food which is normally eaten with the fingers.

1st December 1993

To clarify the liability of beverages, the wording of Excepted item 4 and Item 6 of Items overriding the exceptions was changed, together with the insertion of Item 5A of Items overriding the exceptions (Beverages Order 1993).

1st January 2005

The wording of Note 3(b)(ii) was changed to provide clarity over potential time of supply issues regarding supplies of hot food.

1st October 2012

Introduction of Notes (3A), (3B), (3C) and (3D) to help ensure that hot takeaway food is taxed consistently.

Introduction of Excepted item 4A to ensure consistency of treatment of sports drinks.