Question for VAT experts

[Deleted User]

Hi

I am looking at setting up a business were I provide cafes and coffee shops with cakes and biscuits that have been baked in my home. The rules around VAT in this sector are complicated, especially with the term 'catering'.

Does anybody know if these goods will be zero or standard rated?

Thanks

Don

MarieNoelle

This should be a good starting point
https://www.gov.uk/government/publications/vat-notice-7091-catering-and-take-away-food/vat-notice-7091-catering-and-take-away-food

[Deleted User]

Thanks but it still is not 100% clear. At one point I thought zero rated then something else contradicted it later on.

[Deleted User]

I own multiple companies and this is just a new addition to the portfolio. The client list worked out fine in the end.

With regards to the cake and buscuit scenario, I don't think this applies here as that is an issue for the retailer according to the article. I suppose this is only really an issue if you hit the threshold and have to register but it saves having to deal with pricing issues in the future if it gets resolved now.

Could really do with some clarity if anybody specialises in VAT?

MarieNoelle

Hi,
the advice given is right, unless we know what you put in your cakes and biscuits and how they will be consumed (take away or on site) no VAT experts however good they are will be able to help. Maybe if you give a description we can try and help. For example chocolate covered biscuits are treated differently to plain biscuits, scones purposely kept hot are treated differently to scones cooling off naturally etc...it's not rocket science, it's a question of finding the excepted items in VATA 1994 sch 8 group 1.

[Deleted User]

I was under the impression though that this was an issue for the retailer with regards to whether it's served hot or not or if it is consumed on premises or not. As I would be supplying the foods to the cafes, I would have no idea what happens to it when I give it to them. Customers could eat in or take out. Scones could be sold cold or heated up by the cafe. This is why I think that would be an issue for the cafe to determine their VAT treatment.

A Victoria Sponge is clearly a cake but a cheesecake has a buscuit base even though it's called a cake.

MarieNoelle

Look at para 3.4 and 3.6

https://www.gov.uk/government/publications/vat-notice-70114-food/vat-notice-70114-food