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Liability of supplies

Food and supplies in the course of catering

There is a broad zero-rating for supplies of food which is described in V4.217–V4.225. However, supplies made in the course of catering are specifically excluded from zero-rating and are therefore normally standard-rated (or temporarily reduced-rated). The meaning of supplies made in the course of catering is explored in V4.220. The temporary reduced-rating is described in V4.424.

Catering for employees

If staff are provided with food and drink free of charge, there is no VAT due since the value of the supply is deemed to be nil. However, if the staff are charged VAT will need to be accounted for. The rules are described under 'Accommodation and catering for employees' at V3.216.

Free catering for customers, friends or family

HMRC states in VFOOD5080 that when the owner of a restaurant supplies meals to himself or his family there is a taxable supply of goods. However, HMRC regards this as a supply of food rather than catering.