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HMRC internal manual

VAT Taxable Person Manual

Particular trades: Catering: Catering in staff or company canteens and other non-commercial establishments

Where an outside caterer is used, you should always start with the agreement between the client and the catering contractor. By examining that agreement in conjunction with the guidance in VTAXPER64150, VTAXPER64200 and VTAXPER64250, you should be able to decide which of the following situations apply:

  • a catering contractor operating in their own right, as a principal (VTAXPER64150); or
  • a catering contractor operating as an agent of the client (VTAXPER64200); or
  • a catering contractor operating as a principal in the purchase and sale of the raw materials to the client and then as an agent of the client in the preparation, service of the food and collection of the takings (VTAXPER64250).

This is covered in a memorandum of understanding with the British Hospitality Association, which is reproduced at VTAXPER64300.