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”?
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15 Queens Square, Leeds, LS2 8AJ
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