From today (15th July) the rate of VAT on eat-in or hot takeaway food has been cut from 20% to 5% until 12th January 2021.
The temporary VAT cut was announced as part of the Summer Statement as an urgent response to the coronavirus pandemic as part of the effort to support businesses impacted by forced closures and social distancing measures.
Last week, ACS received clarification that any vendor providing food and drink for consumption on the premises, or hot takeaway food or drinks are eligible for the reduced rate, including local shops.
Cold takeaway food and drinks are not included in the reduced rate.
ACS chief executive James Lowman said: “Local shops have done a fantastic job ensuring that they have been able to continue feeding their communities safely and effectively.
“We welcome clarification from the Treasury that convenience stores and other small shops will be able to benefit from the reduced rate of VAT on specific food and drink sales.”
Figures from the 2019 Local Shop Report show that almost one in four convenience stores have some form of hot food counter or cabinet (23%) with around one in six (15%) currently providing either indoor or outdoor seating for customers.
Guidance on the temporary reduced VAT rate can be found here: https://www.gov.uk/guidance/catering-takeaway-food-and-vat-notice-7091
