Did you ever consider, when buying lunch, why you were asked if you were eating in or taking the food away? Sometimes, it’s because you are charged extra for eating in rather than taking food away; however, mostly, it’s to make sure VAT is charged correctly.
If you operate a business that caters to cafés or sandwich-style food businesses, you need to make sure 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 VAT-related mistakes that can affect your business.
What Can Go Wrong by Making These Cafe Vat-Related Mistakes?
Staff at such locations sometimes forget to ask whether the food will be consumed on-premise, which results in a zero-rated VAT charge instead of the correct standard rate. This is good news for the client; however, the liability remains with the business owner. It is therefore recommended to put ineffective solutions in place; having a meticulous Accountant who reviews your books and VAT returns could save you from penalties and HMRC investigations.
With MTD looming around the corner, it is advisable to ensure that processes and systems are in place to avoid complications going forward.
Clear House Accountants are specialists in London for accounting; our in-house VAT consultants help businesses stay ahead of complex VAT rules and regulations while ensuring compliance with the highest standards.
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