VFOOD0200 - UK VAT law
Section 30(2) of the VAT Act 1994 allows zero-rating for supplies covered by Schedule 8 of the Act. Group 1 Schedule 8 outlines those supplies of food and related goods which are zero-rated and those which are standard-rated.
As a basic position, all supplies listed within the general items are zero-rated unless falling within the excepted items or within item (a) as a supply in the course of catering.
However, the items overriding the exceptions then specify certain items that are zero-rated again by virtue of overriding the excepted items.
The Notes section of the law contains a number of clarifications that apply to both the excepted items and the items overriding the exceptions.
Each excepted Item has a separate section within this guidance which discusses the products that fall in and out of the specific categories detailed in the law.
The zero rate for food existed before implementation of the EC Sixth VAT Directive. However, its retention by the UK was permitted under the directive by virtue of Article 28, which allowed those zero rates in force on 31st December 1975 to be maintained.
SCHEDULE 8 ZERO-RATING, GROUP 1 - FOOD
The supply of anything comprised in the general items set out below, except:
- a supply in the course of catering; and
- a supply of anything comprised in any of the excepted items set out below, unless it is also comprised in any of the items overriding the exceptions set out below which relates to that excepted item.
- Food of a kind used for human consumption.
- Animal feeding stuffs.
- Seeds or other means of propagation of plants comprised in item 1 or 2.
- Live animals of a kind generally used as, or yielding or producing, food for human consumption.
- Ice cream, ice lollies, frozen yogurt, water ices and similar frozen products, and prepared mixes and powders for making such products.
- Confectionery, not including cakes or biscuits other than biscuits wholly or partly covered with chocolate or with some product similar in taste and appearance.
- Beverages chargeable with any duty of excise specifically charged on spirits, beer, wine or made-wine and preparations thereof.
- Other beverages (including fruit juices and bottled waters) and syrups, concentrates, essences, powders, crystals or other products for the preparation of beverages.
- Any of the following when packaged for human consumption without further preparation, namely, potato crisps, potato sticks, potato puffs, and similar products made from the potato, or from potato flour, or from potato starch, and savoury food products obtained by the swelling of cereals or cereal products; and salted or roasted nuts other than nuts in shell.
- Pet foods, canned, packaged or prepared; packaged foods (not being pet foods) for birds other than poultry or game; and biscuits and meal for cats and dogs.
- Goods described in items 1, 2 and 3 of the general items which are canned, bottled, packaged or prepared for use:
- in the domestic brewing of any beer;
- in the domestic making of any cider or perry;
- in the domestic production of any wine or made-wine.
Items overriding the exceptions
- Yogurt unsuitable for immediate consumption when frozen.
- Drained cherries.
- Candied peels.
- Tea, mate, herbal teas and similar products, and preparations and extracts thereof.
- Cocoa, coffee and chicory and other roasted coffee substitutes, and preparations and extracts thereof.
- Milk and preparations and extracts thereof.
- Preparations and extracts of meat, yeast or egg.
- “Food” includes drink.
- “Animal” includes bird, fish, crustacean and mollusc.
- A supply of anything in the course of catering includes:
- any supply of it for consumption on the premises on which it is supplied; and
- any supply of hot food for consumption off those premises;
- Item 1 of the items overriding the exceptions relates to item 1 of the excepted items.
- Items 2 and 3 of the items overriding the exceptions relate to item 2 of the excepted items, and, for the purposes of item 2 of the excepted items “confectionery” includes chocolates, sweets and biscuits; drained, glace or crystallised fruits; and any item of sweetened prepared food which is normally eaten with the fingers.
- Items 4 to 7 of the items overriding the exceptions relate to item 4 of the excepted items.
- Any supply described in this Group shall include a supply of services described in paragraph 1(1) of Schedule 4.