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HMRC internal manual

VAT Food

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HM Revenue & Customs
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Excepted items: catering: catering in particular situations

Supplies of catering in factories, offices and other workplaces

The provision of catering facilities in workplace situations is covered in detail in Notice 709/1, Catering and take-away food and in VFOOD4500.

As many traders use catering contractors, you should also be satisfied that you know who is making the supply, and the relationships between the relevant parties: see VFOOD5020.

Supplies of catering in educational establishments

This information applies where the establishment is acting as principal. Where the catering is supplied by a contractor acting as principal the supply is standard-rated. Notice 709/1, Catering and take-away food contains more information.

Local authority educational establishments

The provision of education in schools by a local authority is a non-business activity. Catering supplied by a local authority to its own pupils is regarded as incidental to the provision of that education and likewise, therefore, a non-business activity.

The rules covering this relief are similar to the exempt relief allowed in the independent sector.

Schools, colleges and universities not run by a local authority

Where the educational establishment is an eligible body within the meaning of Note 1 to Group 6, Schedule 9 of the VAT Act 1994, not only are its supplies of education exempt, but exemption also applies to any supplies of goods and services that are closely related to that exempt education. Item 4 of Group 6 provides this exemption, which extends to supplies of catering. VATEDU, Education provides guidance on the meaning of eligible body in Group 6 and explains the scope of exemption for supplies of catering by such bodies.

The exemption for catering in an educational institution can apply only to supplies by an eligible body meeting the necessary conditions. Any supply by a catering contractor acting as principal will be standard-rated.

Withdrawal of ‘majority use’ concession

Until 31 August 1997, establishments which exempted or treated as non-business supplies of catering to students could treat supplies to staff, visitors or other non-students in the same way in facilities which were mainly used by students (the majority use concession). This was withdrawn from 1 September 1997; and so, although supplies to students remain exempt or non-business, VAT must be accounted for on supplies to non-students. This can be done either at point of sale or on the basis of a method of apportionment agreed with their local VAT office. This also applies to students’ unions who exempt supplies of catering to students.

Further information about catering in universities and in students’ unions can be found in V1-07 Chapter 24A Clubs and associations.

Supplies of catering in hospitals and similar institutions

The provision of care and medical treatment by hospitals and other approved institutions is exempt under Item 4 Group 7 of the VAT Act 1994. The exemption is extended to cover the supply of goods in connection with the provision of care. This includes supplies of catering to patients both on the ward and in out-patients departments. It does not include supplies of catering to staff and visitors.

Notice 709/1, Catering and take-away food deals with situations when a contractor, rather than the institution, provides the catering.

Supplies of catering in service messes

The VAT treatment of supplies of catering in armed forces’ Service messes is dealt with inV1-07 Chapter 24A Clubs and associations.