- Zero VAT rated supplies: food and drink products
- UK tax system offers zero VAT rate on certain goods and services, including some food and drink items
- Rules for establishing VAT treatment for food and drink products are complex and sometimes contradictory
- Essentials of zero rated VAT on food and drink include reducing cost of essential items
- Distinction between zero rated and standard rated food items can be contentious
- VAT legislation from 1994 may not cover new food products and manufacturing processes
- Significant litigation on VAT liability of food and drink products
- Multifactorial tests to determine if a product can be zero rated
- Options for manufacturers/retailers include requesting ruling from HMRC, standard rating potential zero rated products, or zero rating with risk of incorrect rate application
- Importance of correct VAT classification for businesses to avoid overcharging or undercharging customers and potential penalties from HMRC
Source: bdo.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
