Drinks and savoury snacks

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Drinks and savoury snacks
  • Drinks
  • Alcoholic beverages
  • Non-alcoholic beverages
  • Zero-rated drinks
  • Sports nutrition drinks ― revised rules with effect from 1 October 2012
  • Savoury snacks
  • Conclusion

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.

De Voil Indirect Tax Service V4.219 (subscription sensitive); VATA 1994, Sch 8, Group 1, Item 3; VFOOD7520

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.

Alcoholic beverages

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:

  • beer, cider and perry (includes shandy and black beer)
  • wine (including fermented communion wine and wine kits)
  • spirits and liqueurs


Other products containing alcohol

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:

  • fruit preserved in alcohol
  • alcoholic desert jellies
  • rum babas

Alternatively, the following items would be liable to VAT:

  • liqueur chocolates
  • alcoholic semi-set jellies that are designed to be swallowed as cocktails

More on Zero-rated supplies: