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HMRC internal manual

VAT Food

Items benefiting from the relief: What is food?: Food of a kind used for human consumption: Food unfit for human consumption

Waste or contaminated food

Waste or contaminated food unfit for human consumption is standard rated, unless it is sold as an animal feeding stuff (but not pet food), when it qualifies for zero rating under the VAT Act 1994, Schedule 8, Group 1, General Item 2.

Waste oils

Waste oils and fats (that have not been used for cooking) are zero-rated unless

  • they require further processing before becoming suitable for inclusion in animal feed, or
  • they are held out for sale for a non-feeding purpose.

A need for simple sieving or decanting does not disqualify the oil from zero-rating.

Waste oils that have been used for cooking are prohibited from being used in animal feed and are therefore standard-rated. Non-VAT related enquiries on the subject of waste oils shouldbe directed to the Food Standards Agency:

Agricultural and fisheries produce withdrawn from sale

Under the common agricultural policy (CAP) of the European Community, mechanisms are in place to protect the prices obtained by producers. In the case of some commodities, if a reference price is not reached in the market, the supplier is paid a guaranteed price from EC funds: the produce is withdrawn from sale and disposed of in some way not involving sale for human consumption. In such cases, providing the produce is still of a kind used of human consumption, it still qualifies for zero-rating under Group 1, general item 1.

The case of North Isles Shellfish Ltd (EDN/93/0250) concerned a supplier who bought haddock and mackerel which was withdrawn from sale for human consumption under the EC market regulating regime, and sold it to fishermen to use as bait for catching lobsters. Though the fish was marked with an easily removed edible dye, it remained fit for human consumption.

The tribunal found that the withdrawal of the fish from the market for reasons connected with the balance of supply and demand did not affect its status as food of a kind used for human consumption, and it therefore qualified for zero-rating under General Item 1. (In addition, its use as a bait was no different from its further use in fattening the lobsters for sale, so it was also zero-rated as an animal feeding stuff under general item 2 when sold as a bait.)