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HMRC internal manual

VAT Food

Excepted items: catering: secondary catering issues: grocery items

Where a catering outlet sells items of food or drink which are commonly accepted as grocery items, and are in the same form as when sold by a grocer or supermarket, the supply is not in the course of catering and zero-rating is allowable as appropriate. Examples are packets of tea, jars of coffee, loaves of bread, and bags of sugar.

Zero rating also applies to milk when sold in factory-sealed containers, such as bottles or cartons, either from a vending machine or across a counter. This applies even though it may be for consumption on the same premises, for example a factory canteen selling cartons of milk for use in tea clubs on the site as a whole.

Zero rating does not apply to milk poured into glasses or cups, nor for items such as small packets of biscuits where it can be reasonably assumed that they will be consumed on the premises.