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HMRC internal manual

VAT Food

Excepted items: catering: premises: sales on premises other than from a fixed outlet

Zeldaline Ltd 

This decision pre dates the 2012 amendments to the VAT law.

Following the decision in this case we reviewed our interpretation of the pre 2005 Note (3)(a) where there is no fixed outlet. We accepted that where a sandwich seller enters a building to sell cold food it is not a supply in the course of catering (hot food would be standard-rated).

The appellant, Zeldaline Ltd (LON/89/0087Y), made up baskets containing a variety of sandwiches and pots of fruit salad. These were delivered to the City of London, where employees of Zeldaline Ltd, moving from office block to office block, sold the sandwiches and fruit salad in reception areas, corridors and other common areas.

The tribunal was asked to determine whether old note (3)(a) applied in that such sales were supplied for consumption on the premises on which they were supplied.

It decided that, for Note (3)(a) to apply, there had to be some intention on the part of the supplier that the food sold should be consumed on the same premises. In addition, the Chairman said that the supplier must have some right or duty to be on the premises.

The trader had no knowledge as to where the sandwiches were consumed, and did not care. Neither did the vendors have any right or duty to be on the premises - they were allowed entry depending on the good will of the reception or security staff. The tribunal concluded, therefore, that the supplies did not come within the Act’s definition of catering, and were zero-rated.

Another case, that of E & G Catering Services Ltd (V.15552), may also be of note in these circumstances, though in the context of making airside sales from a static vehicle at Heathrow airport.

Where a trader’s business is similar to the above situation (selling to individuals from baskets, a mobile van or mobile trolley), and sales are made on what might be called a casual and roving basis, you should apply the following criteria:

  • does the trader have any verbal or written agreement with any of the occupiers, over and above the permission of reception staff, to enter the premises, and
  • is the trader bound by any contractual agreement to supply the occupants?

If the answer is no to both of these questions, it is likely that the situation is similar to the Zeldaline case and it is not one of catering.