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HMRC internal manual

VAT Food

Excepted items: catering: premises: introduction


  • you are not satisfied that a supply is in the course of catering as defined in VFOOD4100, and
  • the supply is not one of hot take-away food (as discussed in VFOOD4200),

then you must consider whether Note (3)(a) to Group 1 applies. The significance of this note is that cold food and drink, which is not otherwise excluded from the zero-rated relief, that is to be taken away from the premises on which it is supplied, retains its zero-rating. If, however, it is supplied for consumption on the same premises it is standard-rated.

The correct interpretation of this note has been debated in many tribunals and its application can still cause problems.

In order to provide further clarity regarding ‘premises’ note (3A) was added to this section of the VAT Law and is effective from 1 October 2012. This new note clarifies what is considered to be premises and states ‘For the purposes of note (3) to Group 1, in the case of any supplier, the premises on which food is supplied include any area set aside for the consumption of food by that suppliers customers, whether or not the area may also be used by the customers of other suppliers’.