The zero rating for food is to be re-aligned to remove inconsistencies and perceived anomalies. The areas of focus are: hot take-away; food consumed on shared premises; and nutrition beverages.
The proposal seeks to ensure that all food that is above the ambient temperature when provided to the customer is standard rated with the exception of freshly baked bread.
Additionally the thin line between “on premises” and “off premises” will be removed. As a result, food supplied in all areas set aside for the purpose, including premises shared with other retailers, will be treated as supplied in the course of catering and standard rated. As a consequence food consumed in food courts in shopping centres and at table and chairs on pavements will be standard rated.
Sports drinks are usually zero rated because of their nutritional content. This proposal is intended to standard rate all sport drinks regardless of their nutritional content.
Footnote: Under EU law, once the tax base is broadened in this respect there can be no reversal. The draft legislation is the subject of consultation with a 4th May 2012 deadline for responses. It remains to be seen whether these measures create simplification or more confusion. Example, how do you define “freshly baked bread”?
0113 815 1315
15 Queens Square, Leeds, LS2 8AJ