Food & Drink

1 General

1.1 This Information Leaflet sets out the rates of VAT on supplies of food and drink.

1.2 Most food and drink sold by retail shops is chargeable to VAT at the zero-rate. This includes most basic foodstuffs, for example, bread, butter, tea, sugar, meat, milk, vegetables etc. Certain items of food and drink are specifically excluded from the scope of the zero-rate. These are taxable at the standard and reduced rates of VAT. Food liable at the reduced rate includes flour or egg based bakery products e.g. cakes, crackers, certain wafers and biscuits. Food and drink liable at the standard rate includes sweets, chocolates, confectionery, crisps, ice-cream and soft drinks.

In addition food and drink liable at the standard rate includes:-

• frozen desserts, frozen yogurts and similar frozen products, and prepared mixes and powders for making any such product or similar products;
• uncooked confectionery;
• savoury snack products made from cereal or grain, fried bread segments, pork scratchings, and similar products and
• soft drinks and alcohol.

2 Food and drink supplied in the course of operating a catering business (including Vending Machines, Take-Aways, and Supermarkets).

2.1 Food and drink normally chargeable to VAT at the zero-rate becomes liable to VAT at the reduced rate when supplied in the course of operating hotels, restaurants, cafes, canteens, public houses, caterers and other similar businesses or by means of vending machines.

2.2 Food and drink normally liable to VAT at the standard rate becomes liable at the reduced rate when supplied in the course of provision of a meal by any of the specified classes of business (see preceding paragraph) excluding alcohol, soft drinks and vegetable juice.

2.3 Alcohol, soft drinks, bottled waters and health drinks are liable to VAT at the standard rate in all circumstances.

2.4 All hot take-away food is liable at the reduced rate irrespective of the rate which would apply if it were supplied otherwise (but see paragraph 4.1).

2.5 Vending machine sales of zero-rated food and drink are liable at the reduced rate. Food and drink other than zero-rated food and drink sold by means of a vending machine are taxable at the appropriate rates e.g. cakes the reduced rate, confectionary the standard rate.

2.6 Zero-rated food and drink remains free of VAT so long as it is not supplied by means of a vending machine or in the course of operating any of the specified classes of business (see paragraph 2.1 above).

2.7 Cold take-away food and drink supplied by supermarkets, etc. are taxable at the zero, reduced or standard rate, as appropriate (see paragraph 4.1).

3 Summary

The rates of VAT appropriate to the supply of food and drink through the various outlets are set out below. A tabular summary is attached (Appendix I).

4 Retail shops including supermarkets

4.1 Food and drink supplied by retail shops is liable at the zero, reduced or standard rate as appropriate. The supply of freshly baked bread which may have retained some heat after baking but which has not been maintained heated and which is supplied in the course of a grocery business is liable at the rate appropriate to the same food when cold. However, hot food, including hot cooked chickens is liable to VAT at the reduced rate.

4.2 Supermarkets which operate restaurants or café’s are generally regarded as carrying on a separate restaurant business. Food and drink supplied in the course of the restaurant business is normally liable at the reduced rate. This includes fruit juices, ice cream, and confectionery supplied in the course of the provision of a meal (but the supply of such foods for taking away is liable at the standard rate). As already stated alcohol, bottled waters and soft drinks other than fruit juices are always liable at the standard rate.

4.3 Food and drink sold by means of vending machines is liable at the reduced rate or standard rate, as appropriate. The zero-rate never applies and food and drink which might otherwise be zero-rated is liable at the reduced rate when sold by means of vending machines. The sale of zero rated food and drink by means of a vending machine is considered to be a service for VAT purposes.

5 Hotels, Restaurants, Cafés, Canteens, Public Houses, Caterers and Similar Businesses

5.1 Food and drink, including fruit juices, supplied with a meal, but excluding alcohol, bottled waters, soft drinks and vegetable juice is liable at the reduced rate. This is so even if the food or drink would have been liable at the standard rate if supplied otherwise (for example, fruit juice or ice cream, liable at the standard rate, is liable at the reduced rate when supplied in the course of the provision of a meal).

5.2 Alcohol, bottled waters and soft drinks are liable at the standard rate in all circumstances.

5.3 Staff meals, when taxable, are liable at the reduced rate.

5.4 Receipts from admissions to dinner dances are liable at the standard rate including the dinner element in the charge. If there are separate charges for the dinner and the dance and payment of the charge for dinner is not a condition of admission to the dance the dinner charge is liable at the reduced rate and the charge for admission to the dance is liable at the standard rate (see separate VAT Information Leaflet Dances).

6 Take-aways: Traders whose business consists entirely of take-aways

6.1 Food and drink supplied will be taxable as follows:

• Hot take-away food and drink the reduced rate.
• Cold take-away food and drink zero %. (e.g. sandwich/cold milk) or the reduced rate. (e.g. cold apple tart) or standard (e.g. chocolate bar), as appropriate.
• Alcohol, bottled waters and soft drinks the standard rate.

6.2 If cold take-away zero-rated food or drink is supplied with hot take-away food for an inclusive price (for example, coleslaw with hot chicken) the entire charge is liable at the reduced rate. Soft drinks supplied with hot take-away food for an inclusive price are liable at the standard rate. It will be open to the proprietor of a take-away business to charge separately for the different constituents of a take-away meal and to pay tax accordingly.

6.3 The term hot take-away food and drink should be understood as including cooked food which is supplied while hot for the purpose of consumption while hot, that is, at a temperature above the ambient air temperature. It includes items such as burgers which consist of hot meat enclosed in a cold bun, cooked chickens and similar food. The term does not include freshly baked bread which may be hot at the time of purchase.

7 Take-aways: Traders whose business does not consist entirely of take-aways

Although, strictly, zero-rated food supplied in the course of operating a hotel, restaurant, public house, canteen or similar business is liable at the reduced rate, application may be made to the Revenue District responsible for your tax affairs to have the take-away activities treated concessionally as a separate activity and, to the extent that the take-away’s consist of zero-rated food, relieved accordingly.

8 Waste food

8.1 Waste food of all kinds which is sold as animal food may be regarded as qualifying for the zero-rate of VAT.

8.2. Waste oils sold for reprocessing are liable to VAT at the standard rate.

9 Location Catering

This service is liable at the reduced rate but alcohol, bottled waters and soft drinks supplied are liable at the standard rate.

10 Catering on off-shore oil rigs outside territorial waters and on foreign-going ships and aircraft

The zero-rate effectively applies.

11 Catering in schools and hospitals

Catering services are exempt from VAT where supplied

1. to patients of a hospital or nursing home in the hospital or nursing home; and
2. to students of a school in the school.

Further information

Enquiries regarding any issue contained in this Information Leaflet should be addressed to the Revenue District responsible for the taxpayer’s affairs. Contact details for all Revenue Districts can be found on the Contact Details page.

VAT Interpretation Branch,
Indirect Taxes Division,
Dublin Castle.

January 2010

Appendix I

Food and Drink: Rates of VAT

Food and Drink: Rates of VAT

Note: Retail Stores including supermarkets – see paragraph 4 of leaflet.

This information leaflet which sets out the current practice at the date of its issue is intended for guidance only and does not purport to be a definitive legal interpretation of the provisions of the Value-Added Tax Act 1972 (as amended).