Do we pay VAT on food?

freehub

We don't do we, even the direct.gov says we don't, but my parents insist we do, who is correct?

outofbreath2

We pay VAT on some food. The 'essentials'. However definition of essential is highly confusing whereby something like cake is considered essential but biscuits aren't essential so we pay VAT on them.

That's just an example of how confusing it is, it could be the other way round and we pay VAT on cake but not biscuits. We might even pay on both, or niether, I've no idea in this particular instance - but that's the principle.

ETA - I meant to say 'Not the 'essential' oops. Didn't mean to confuse.

pbt150

You don't pay VAT on basic food, but do on luxuries.

For example, you pay VAT on chocolate-covered biscuits, but not on chocolate-chip cookies.

There's also a legal definition of a cake vs a biscuit for the purposes of VAT.

Bronzie

There's no VAT on anything classed as "essential" - ie milk, bread, vegetables. But there is VAT on "luxuries" which includes things like crisps, confectionary, ice cream.

The definitions are fairly complex but the relevant VAT Notice is here if you are really interested.

outofbreath2

ETA Bronzie beat me to it with the link so I've removed mine.

Flapjacks are zero-rated.

Skeltron

Think it's anything that's a 'luxury', that's my guess.

Aggieboy

Hubster, you're getting shafted!! Full VAT on a Mars bar plus 5% on the electric used to microwave it.

Radioactiveman

http://www.which.co.uk/news/2010/06/wha ... -on-217890

Radioactiveman

http://www.which.co.uk/news/2010/06/wha ... -on-217890

Mccaria

This is a good synopsis

www.bbc.co.uk/dna/h2g2/A4803040

It also makes mention of probably the most interesting food VAT case - is the Jaffa cake a cake (no VAT) or a biscuit (chocolate covered so subject to VAT).

Anonymous

That's why Jaffa Cakes are so called, so you don't pay VAT on them.

The difference between cake and biscuit is something to do with hard and soft -

A cake goes hard as it's left out, a biscuit goes soft...

nottscobb

pbt150 wrote:

There's also a legal definition of a cake vs a biscuit for the purposes of VAT.

Biscuits are hard and go soft when they go stale, cakes are soft and go hard. For this reason Jaffa cakes had a big legal arguement with the tax man because they package and market them like biscuits so the tax man wanted his share but by the legal definition they are cakes and Mr Jaffa Cake gets to keep all the money.

Useless fact of the day over.

Anonymous

Beaten to it by one minute.

Mccaria

Beaten to it by one minute. - That's what Andy Schleck said

McVities defended its classification of Jaffa Cakes as cakes, producing a 12" (30 cm) Jaffa Cake to illustrate that its Jaffa Cakes were simply miniature cakes.[9]

McVities argued that a distinction between cakes and biscuits is, among other things, that biscuits would normally be expected to go soft when stale, whereas cakes would normally be expected to go hard. It was demonstrated to the Tribunal that Jaffa Cakes become hard when stale. Other factors taken into account by the Chairman, Potter QC, included the name, ingredients, texture, size, packaging, marketing, presentation, appeal to children, and manufacturing process. Potter ruled that the Jaffa Cake is a cake. McVities therefore won the case and VAT is not paid on Jaffa Cakes.

Anyone fancy a 12 inch Jaffa cake ?

fleshtuxedo

If it's a selection tin of biscuits, then the entire tin is subject to VAT if more than 70% of the weight of the biscuits are chocolate coated and would if sold individually be VAT liable. Biscuit manufacturers ensure that the figure is just below 70%, which renders the entire selection tin VAT exempt.

Fascinating isn't it.

Bottom line : sitting on your ar*e eating biscuits = VAT exempt; cycling kit = VAT liable. It's a scandal :evil:

pbt150

Double post.

pbt150

http://www.pimpthatsnack.com/project/332/

Bronzie

FleshTuxedo wrote:

cycling kit = VAT liable. It's a scandal :evil:

But not helmets (safety protection equipment is always zero-rated).

Fcuk I hate reading these stupid VAT Notices - they are ALWAYS so confusing! :evil:

fleshtuxedo

Mccaria wrote:

Anyone fancy a 12 inch Jaffa cake ?

12" Jaffa Cake? Pah!

http://www.pimpthatsnack.com/project/174/

fleshtuxedo

Ahh PBT, ya beat me to it!

Mccaria

Mccaria wrote:


Anyone fancy a 12 inch Jaffa cake ?


12" Jaffa Cake? Pah!

http://www.pimpthatsnack.com/project/174/

Impressive - but how do you get it into the packet ?

flite

Paying VAT on pure fruit juice really irritates me. We shouldn't have to pay tax on any basic, healthy food.
And I don't consider stuff like soap, detergent and toilet rolls as luxuries.

Bronzie

Flite wrote:

And I don't consider stuff like toilet rolls as luxuries.

But there's no VAT on newspapers............ahem :oops:

EKIMIKE

Assuming the Hub's initial enquiry relates to the VAT rise due next year (it is next year isn't it?), then i'd say not to worry about it. It'll be insignificant compared to the rising cost of food experienced in the last year or so, due to inflation.

For some reason, inflation on food products is around 18% (as far as i'm aware)!!! Looks like Wheat based products are going to go crazy this year too as Russia and the USA have had bad harvests.

When i was working a fruit and veg deparment in a supermarket last year, prices were going up weekly in some cases. Strawberries increased by about 50% in one month IRIC. Even carrots went up approx. 10% and they're not really affecred so much by seasonal supply and demand.

Cressers

The recent spate of food price rises are caused by speculation. The city-slickers have moved away from financials and got their grasping claws into edible commodities. B*st*rds!

Ollieda

Its amazing how the words VAT and FOOD never fail to bring out the closet lawyers with the Jaffa Cake case.....I was sure everyone had heard about this by now its quoted so many times!

Will, if this is more worrying about budgeting as a student then stop worrying. The media makes out that living as a student is like cowering in a corner of a run down building with nothing to keep you warm but a blanket and some cold baked beans for dinner.......its not like that at all, you can live fairly well on just basics and still have enough money for bike bits!

the_hundredth_idiot

Isn't there also the complication around eat in/eat out with hot food? Something like a cold sandwich is the same price regardless whether you take away or eat in, but a jacket potato costs more to eat in than take away because they have to add VAT if you eat in?

verylonglegs

The Hundredth Idiot wrote:

Isn't there also the complication around eat in/eat out with hot food? Something like a cold sandwich is the same price regardless whether you take away or eat in, but a jacket potato costs more to eat in than take away because they have to add VAT if you eat in?

Yeah something like that, I can't remember the exact rulings but I do remember reading about the providers of take-aways complaining they have to pay VAT where as supermarkets sell hot ready to eat chickens and sausage rolls VAT free iirc.