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bigduckontax
bigduckontax, Accountant
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A catering business is registered . Among the supplies

Customer Question

A catering business is registered for VAT.
Among the supplies made in the markets and shows, the Gross takings are made up of 70% hot food and 30% cold food.
For VAT Return purposes and particularly to calculate the Output tax for the period, can the takings relating to cold food be deducted from the total Gross takings, so that the Output tax is calculated using the fraction 20/120 X hot food takings?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. VAT Notice 709/1 covers the position. I am of the opinion that these supplies are standard rated. Here is an extract from this notice: 'What happens with hot and cold food sold at the same time? If you sell a mixture of standard-rated and zero-rated items for an inclusive price for consumption off the premises, you will have to work out the tax value of each item in order to calculate how much VAT is due on the standard rated item. You can do this on the basis of cost or market values as explained in Notice 700 The VAT Guide. Examples of mixed supplies of take-away food include:burger, chips and a milkshakea cup of tea with a non-chocolate coated biscuita meal consisting of hot and cold items or dishes supplied in separate containersYou are normally considered to be making mixed supplies if each of the items in the inclusively priced package can be purchased separately from your menu. This is not the same as the single item of food that happens to have a cold ingredient for which one charge is made as explained in paragraph 4.7.' Furthermore, in the scenario you set out almost certainly all services will be standard fated viz [same source]: 'However, if you are supplying the food under a contract, for example to cater for an event, you are making a supply in the course of catering and all your supplies will be standard-rated.' Regrettably this is a highly complex area of VAT. Cold food doas not necessarily attract zero rating. I am so sorry to have to rain on your parade.

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