Catering

HMRC are actually VERY clear on the subject. In simple terms (and making the occasional assumption due to the unclear nature of your 'facts':

Taxable supplies are supplies of goods or services that:
1) are made in the United Kingdom (UK) or the Isle of Man;
2) are made by a taxable person;
3) are made in the course or furtherance of business; and
4) are not specifically exempted. If a supply is specifically exempted, then it is termed an exempt supply.

Input VAT may be recovered by a VAT registered business where it rates to taxable supplies made by, or intended to be made by that business.

Where the input tax relates wholly to exempt supplies, that tax is blocked from recovery.

Where the input tax is attributed to both taxable and exempt supplies a partial exemption calculation is undertaken to apportion the residual input tax between the two for recovery purposes. Naturally, all of the input tax may be recoverable under the de-minimis rule.