Food to go retailers will be charged VAT on hot food following Chancellor George Osbourne’s Budget pledge to close tax loopholes.
From October, retailers selling any type of hot food will be forced to pay 20% of the sale price in VAT. Any food served above “ambient” air temperature will be eligible for VAT, including pies, pastries and toasted sandwiches. The only exception will be freshly baked bread. It is expected that this will generate an extra £105m in annual revenue.
The government is currently canvasing views on the subject through a public consultation. The deadline for submissions in May 4 and they can be made online here.
Association of Convenience Stores public affairs director Shane Brennan said that “while clarity on what was a grey area was certainly welcome, we would rather see VAT taken off products than being placed on”.
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