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News & Views Hot food takeaway faces tax hike


From this October, supermarkets and other retailers selling any type of hot takeaway food will have to charge VAT at 20% to close a tax loophole. Currently some retailers claim hot food, such as rotisserie chickens, is not designed to be eaten immediately and is only kept hot to improve its appearance and aroma. This has led to supermarkets selling very similar products to take- away outlets but without the VAT. The change will make 20% VAT pay- able on all food served above ‘ambient”’


air temperature, including pies, pas- ties and toasted sandwiches. The only exception will be freshly baked bread. The Government estimates the change will bring in an extra £105 million a year by 2013-14. The amendment, dubbed the ‘hot chicken tax’ is likely to cause headaches for some retailers. Toasted sandwiches from Subway, for example, will taxed at a higher rate than those that are unheated as there is no VAT on the sale of cold food.


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Spice Business Magazine


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May/June 2012


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