Supply of catering services
One of many contentious areas of VAT is the treatment of certain types of food. In previous articles, we have often mentioned VAT cases that, to the lay person, make VAT law seem ridiculous. For example, the case about McVitie’s ‘Blissfuls’, which consist of a:
•biscuit cup with a flat bottom base;
•layer of chocolate hazelnut and a layer of chocolate;
•McVitie’s logo made of biscuit on top that does not cover the entire top, so leaving some of the chocolate underlayer exposed.
This meant that they had to be standard rated, as ‘biscuits wholly or partly covered with chocolate or some product similar in taste and appearance’ are excluded from zero-rating.
A recent VAT case concerned a company that supplied cooked meals to private and state-run nurseries for lunches and afternoon meals, with all meals cooked freshly each day. The food arrived hot and, in order to satisfy health and safety requirements, was consumed within three-and-a-half hours of it being cooked.
The contracts between the company and the nurseries required that the food was consumed on the nursery premises and that it would be supplied hot. Was this a standard rated ‘supply in the course of catering’? If not, it would be zero-rated food.
While the company did not provide premises, seating, cutlery, or staff to assist with serving the meals provided, the food was delivered hot and ready to eat on the nursery premises, with no reheating or cooking required by the nursery. The service therefore resembled a catering service offering planned meal options, with invoices issued per meal and not per food item.
The Tribunal concluded that the ordinary person would regard the supply as catering, because:
•hot, ready-to-eat meals, ordered from a menu, were delivered for immediate consumption; and
•they were presented in a manner consistent with commercial catering.
If your business supplies food or catering services, make sure you have the VAT treatment correct, as the law can be very nuanced. Please contact us if you feel you may need more help in this area.
