Rise in VAT on hot and cold food

Hospitality type products in the UK were given a temporary boost by the Chancellor following the pandemic lockdowns, bringing the VAT rate down from 20% to 5% in order to boost customer demand.

In order to assist businesses to make the switch back to the usual rate, from 1 October 2021 the VAT rate on these products is due to increase to 12.5% until to 31 March 2022. After this period, they are due to return to the standard rate of 20%.

The VAT rate applies to the following categories:

1. Hot and cold food for consumption on the premises on which they are supplied
2. Hot and cold non-alcoholic beverages for consumption on the premises on which they are supplied
3. Hot takeaway food for consumption off the premises on which they are supplied
4. Hot takeaway non-alcoholic beverages for consumption off the premises on which they are supplied.

All hot and cold food that is prepared on-site will need to have its pricing updated to reflect the increase in VAT from 5% to 12.5%. You can use ShopMate to update your VAT rates on individual products.