In the UK most basic food stuffs are zero rated. However, the definition of 'basic' is not straightforward and many of the foods are zero rated as a result of historical legislation dating back to the introduction of VAT in 1973.

VAT Notice 701/14: food has recently been updated. The notice explains what types of foods are zero rated and standard rated for VAT. The notice includes many examples of different food categories. Famously, cakes are zero rated but not all biscuits are. However, biscuits wholly or partially covered in chocolate are standard rated. This topic was the subject of a landmark case concerning Jaffa Cakes. The VAT Tribunal had to decide whether a Jaffa Cake was a cake or a biscuit (in case you were wondering, the court ruled it was a cake and hence zero rated)!

The main change in the updated version of the VAT notice refers to the ending of the temporary reduced VAT rate of 12.5% for hospitality, holiday accommodation and attractions that remained in place until 31 March 2022. Relevant supplies have now reverted to the 20% standard rate.

Source: New feed