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HMRC internal manual

VAT Food

Items benefiting from the relief: what is food?: food packaging: general

The VAT position of standard-rated packaging supplied with zero-rated food is determined under the general rules on mixed supplies described in VATSC, the VAT supply and consideration manual, and set out in Notice 700, the VAT Guide. There are no special legal provisions relating specifically to food packaging.

Normal and necessary packaging, including ordinary tins, bottles and jars is treated as part of the goods which it contains. The price which the customer pays is treated as a payment for the contents of the packaging alone. This means that if a supply of the contents is zero-rated, zero-rating also applies to the packaging.

Examples of packaging which fall within this definition are:

  • baked beans in a tin
  • jam, marmalade and preserves in a plain jar
  • biscuits in cellophane packs
  • coffee in vacuum-packed foil packets and outer card packs; instant coffee in a plain glass jar, and
  • paté in moulded plastic containers.

However, if the packaging is more than normal and necessary, there is a mixed supply and VAT is due on the packaging, unless the linked goods concession applies - see VFOOD2840. Apportionment of mixed supplies for the purposes of calculating output tax is dealt with in VATVAL-VAT Valuation.

If a separate charge is made for a container, tax is due and is based on the charge. This applies to a charge made when a container is sent out, or when it is not returned. It also covers refundable deposits on containers, including bottles, though the VAT may be refunded if the deposit is refunded. There is more information about returnable deposits in Notice 700, the VAT Guide.