VAT on takeaway food and drink

VAT on take-away food and drink – What are the rules?

Do you own a bar, a cafe, or a restaurant and sell takeaway food on a daily basis? Here is what you need to know about VAT on Takeaway Food to get up to speed with other eateries. 

do you pay vat on takeaway food

A detailed guide on VAT on Takeaway Food is offered by HMRC as well, which asks for spare hours. However, if you are up for a few minutes, read for a lighter guide. This is just the right post as a good alternative. If your food business is not registered yet, you don’t have to worry about it and VAT at the moment. 

If you intend to get registered, Our Professionals offer the best guide. Feel free to Contact Us!


What is Takeaway Food?

According to HMRC, drinks or food that is consumed off the premises come under the definition of takeaway food. In simple words, we place an order for food that is made in a cafe or restaurant then we take away the food to be consumed at home or somewhere else. 

In case you have your premises to serve food, you are good to charge VAT on all the items you sell within your premises. Some examples of premises include:

  • A facilitated stall at an amusement park.
  • Area in a food court that offers seating to the customers.
  • Outdoor or rooftop restaurant with seating 
  • A proper restaurant 

what is the vat on takeaway food

Basically, any type of area that offers food with seating for the customers is your premises where you can charge VAT on selling items. 

Still in doubt? Choose us for an instant guide!


VAT on Hot Takeaway Food:

There is a standard rate of VAT on hot takeaway food. Currently, it is 20% for drinks and hot food but it has to meet certain terms which are listed below for you.

  1. The food item is heated on the customer’s order.
  2. The advertisement of the selling food clearly indicated that it is being sold hot.
  3. The purpose of heating is solely to consume hot food from the customers.
  4. The packaging is ensured to retain the heat.

Furthermore, if any food item is hot because it just came out of the oven but it is meant to serve cold in reality then it will be zero rated. The zero rated is for  VAT on Takeaway Food that is hot. Food items that are served chilled like drinks, bottled water, and desserts, etc. 

To get charging the right VAT on Takeaway Food, try to check your menu by applying the terms and conditions mentioned above. Let’s take the example of baked potatoes, and apply the test conditions. Does it justify more than one condition? Yes, because baked potatoes are served hot and on takeaway, its packaging is ensured to retain the heat as well. Still don’t get it right?

It is highly recommended to talk to our professionals for a better understanding of terms and conditions, and they offer the best guide!

Two very important factors to ensure while you are charging VAT on takeaway food are:

  • The right amount of charging VAT
  • Declare the right amount on the VAT return

It is also suggested to use the right software for your calculations done right without making it a nightmare. This is a smart way of swift working in this era, this will save your time and energies to invest in the right place of services. 


Understanding Electronic Point of Sale (EPOS):

These days there is multiple software that offer time-saving calculations to record details of VAT. All you have to do is put your products and required details in the software and let it handle the rest for you while you invest your time and energies to up the game of services and other offers to grow your food business. 

EPOS is the kind of software where you can add your available takeaway items with the right pricing and VAT details. EPOS will send the information to Xero and before your next VAT return, the information is ready and you are saved from the hours-long calculations in an extra organizing manner.



With a hope that this post made clearer sense to help you understand how we charge VAT on Takeaway Food, and some other ideas to make organized working right without investing extra energy, this smart working will help to focus more on growing your food brand in the competitive business world. 

If you would like to have more information, feel free to contact us anytime and we will get back to you at our earliest!

Request A Callback

Call Now