Cafe’s VAT related mistakes – Are you making these?
Did you ever consider when buying lunch why you were asked if you eating in or taking the food away? Sometimes it’s because you are charged extra for eating in compared to when you take food away, however, mostly it’s to make sure that VAT is being charged correctly.
If you operate a business that caters to café or sandwich styled food businesses you need to make sure that you are charging VAT correctly, hot drinks and crisps are always standard-rated. Cold sandwiches are treated differently depending on if these are consumed at the premises or taken away, cold sandwiches which are consumed off-premises are zero-rated for VAT purpose. There are multiple Cafe’s VAT related mistakes that can affect your business.
What can go wrong by making these Cafe’s VAT related mistakes?
Staff at such locations are sometimes forgetting to ask the question about where the food will be consumed, which results in a zero-rated VAT charge for food instead of the correct standard rate if the food is being consumed on-premise. This is good news for the client however the liability of this remains with the owner of the business. It is therefore recommended to put ineffective solutions in place, having a meticulous Accountant who reviews your books and VAT returns could end up saving you from penalties and HMRC investigations.
With MTD lurking around the corner it is advisable to make sure that processes and systems are in place to avoid any complications going forward.
Clear House Accountants are specialist in London for accounting, our in-house VAT consultants help businesses stay ahead of complicated VAT rules and regulations while performing compliance work to the utmost efficiency.
Jinesh is a Senior Business Accountant, with a masters in Finance from Westminster University, and specializes in tax and accounting for small to medium businesses with a turnover less than £ 3 Million.
He specialises in helping creative businesses understand and manage their accounting and tax needs and obligations.
As accounting ecosystems evolve, their potential to add value also grows. This has increased the focus on digital solutions to tackle complex business problems. Jinesh helps businesses see the opportunity in this and helps businesses become more efficient and increase performance, using the right solutions.
Some of the key things he focuses on are:
- Helping businesses gain insights from their business data
- Providing complex tax and accounting solutions
- Helping businesses prepare for complex industry developments and changes