When Hot Food Is Not Hot (for VAT Purposes)

Posted: 2nd June 2011

The VAT regulations provide that where food is supplied hot, it is subject to VAT at the standard rate. The legislation defines this as food that is ‘heated for the purposes of enabling it to be consumed at a temperature above the ambient air temperature’.

The key element to the VAT treatment is why the food is heated, not the mere application of heat that has the incidental effect that food can be eaten warm.
The point was clarified by the Upper Tribunal following an appeal by a supplier of home-delivered food. Most of the food supplied was clearly ‘hot’ (standard-rated) food, such as burgers, or ‘cold’ (zero-rated) food such as salads.
However, the business also supplied foods, such as spring rolls, that were delivered warm in order to show that they were freshly prepared.
HM Revenue and Customs insisted that these foods were standard-rated supplies on the ground that when supplied they could be eaten warm. However, the Upper Tribunal disagreed with this argument, which it held confused the purpose of the heating and the intention with regard to the food. The purpose of heating these items was subjective – i.e. to demonstrate that they had been freshly cooked. It was not the intention that they should be eaten hot, although this was a consequence of the action.
This decision may well have more widespread application than is apparent at first glance. If you have a similar issue, contact us for advice.