The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note covers the VAT treatment of drink and savoury snacks. This guidance note should be read in conjunction with VAT treatment of supplies of food and VAT treatment of specialised food products.
Most drinks are liable to VAT as a beverage rather than food. According to HMRC Notice 701/14 , from a VAT perspective, a drink is described as:
“A liquid consumed to increase bodily liquid levels, to slake thirst, to fortify or to give pleasure”
There are a number of drinks which can be zero-rated and these are outlined below.
A business will be required to charge VAT on any beverages that have alcoholic content. Typical examples of alcoholic beverages that are liable to VAT are:
It should be noted that not all food products that contain alcohol are liable to VAT and the VAT treatment of the product needs to be confirmed before VAT is charged. For example, the following food items would be zero-rated:
Alternatively, the following items would be liable to VAT:
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