HM Revenue and Customs Brief 19/11
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Issued on 01 April 2011
This Brief confirms HMRC's view of the VAT treatment of
supplies of hot food made in the course of catering. It has been issued
following the European Court of Justice (ECJ) judgment in the joined
German cases of C- 497/09, C-499/09, C501/09 and C-502/09 (Manfred Bog
The ECJ ruled that the supply of food or meals freshly
prepared for immediate consumption from snack stalls, mobile snack bars
or in cinema foyers is a supply of goods within the meaning of Article
5 of the Sixth VAT Directive if a qualitative examination of the entire
transaction shows that the elements of supply of services preceding and
accompanying the supply of the food are not predominant. This is unlike
the activities of a party catering service which are supplies of
services within the meaning of Article 6 except in cases in which a
party catering service does no more than deliver standard meals without
any additional elements of supply of services.
Furthermore, the ECJ has held that the term 'foodstuffs' in
category 1 of Annex H to the Sixth Directive 77/ 388, as amended by
Directive 92/111 (now category 1 of Annex 111 to the VAT Directive
2006/112), must be interpreted as also covering food and meals which
have been prepared for immediate consumption by boiling, grilling,
roasting, baking or other means.
The significance of the decision for German taxpayers is that
certain supplies of hot food may now be eligible for the reduced rate.
HM Revenue & Custom's(HMRC) position
The UK treats most basic supplies of foodstuffs as zero rated
but along with other specified items there is a specific exclusion from
the zero-rate for supplies made in the course of catering. The Law
(Note 3, Group1, Schedule 8, VAT Act 1994) goes further to specifically
legislate for certain supplies of food that are for consumption on and
off premises including the supply of hot food.
Article 110 of the VAT Directive 2006/112 allows the UK to
retain its zero-rate for food as long as there are clearly defined
social reasons and the supplies are for the benefit of the final
consumer. There can be no extension to the zero-rate provisions and the
Courts have determined that exemptions (including zero rating) must be
construed strictly, but exceptions from the exemption (including Note
3) should not be construed restrictively.
The zero rating provisions form a specific legal framework
and subject to the conditions of the derogation the UK has discretion
as to what supplies fall within those provisions. Since the UK has
specifically legislated to exclude supplies of hot food it is clear
that the intention was not to include such supplies within the
HMRC considers that the ECJ judgment has no implications for
the UK treatment of supplies of hot food and businesses should continue
to treat their supplies in accordance with published guidance.
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Article Published/Sorted/Amended on Scopulus 2011-04-03 19:55:16 in Tax Articles