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UK HMRC wins catering VAT case


HMRC has won a tax tribunal ruling which held that the sandwich shop chain, EAT Limited, had to charge 20% VAT on its bacon breakfast muffins and grilled ciabatta bread products. EAT is now obliged to settle a £632,620 VAT bill for failing to levy VAT on these products.

Under the harmonised EU VAT rules, the UK VAT Act states that only certain foods enjoy nil-rating for VAT. Catering services involving the heating of food for immediate consumption, such as provided by EAT, are liable to full VAT. EAT lost out because it clearly was preparing the food at hot temperatures for immediate consumption, which is viewed as VAT’able catering services.

Pasty Tax excluded incidental heated take away food

The case followed the principles as George Osborne’s infamous 2012 ‘Pasty Tax’, which sought to levy VAT on hot food such as Cornish pasties.  This budget proposal was eventually watered down to exclude freshly-cooked hot pies and sausage rolls still cooling down on shelves.

Post Brexit, the UK would have more freedoms for setting such reduced VAT rates – although the EU has planned to relax its own rules in this area for member states in the next two years.


Latest British news

UK HMRC wins catering VAT case

February 4, 2019

HMRC has won a tax tribunal ruling which held that the sandwich shop chain, EAT Limited, had to charge 20% VAT on its bacon breakfast muffins and grilled ciabatta bread products. EAT is now obliged to settle a £632,620 VAT bill for failing to levy VAT on these products.

EU VAT and tax veto review

January 25, 2019

The European Commission (EC) has proposed switching from unanimous to majority voting on EU VAT and other tax policies.  The aim is to progress fiscal reforms which face immovable opposition from just a limited number of member states. 

UK MTD pilot open to VAT groups

January 24, 2019

HMRC has extended the Making Tax Digital for VAT pilot to members of VAT Groups. MTD will require over 1 million businesses above the £85,000 VAT registration threshold to record 



VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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