Reduced Rate of VAT

VAT Question

My Client is an ice-cream parlour that sells their own homemade ice-cream for consumption within the shop but also as for takeaway. Do my client’s sales temporarily qualify for the reduced rate of VAT as per the rules introduced during the Covid lockdown in 2020?

VAT Answer

The temporary reduced rating introduced by the Government with effect from 15 July 2020 applies to supplies of food for consumption on the supplying businesses own premises and includes such businesses as restaurants, cafes and pubs.

Your clients’ premises will fall into the same type of premises and so any sales of ice cream for consumption on in their own premises will qualify for the reduced rate of VAT. This is currently set at 5% but will increase to a new VAT rate of 12.5% for sales made from 1 October 2020 to 31 March 2021, at which time the VAT rate for the sales will return to standard rate.

Sales of hot takeaway food are also included in the temporary reduced VAT rate.

However, sales of cold food are simply subject to the usual rules governing the VAT treatment of food and section 2.2 of VAT Notice 701/14 confirms that supplies of ice-cream are standard rated.

Your client will therefore need to maintain accurate records to show the split of his sales between those sold for consumption on his premises (currently reduced rate) and those takeaway sales at standard rate.

Related VAT Questions

VAT on Baby Clothes

My client, who sells baby gifts and accessories, has just registered for VAT. Are these zero-rated supplies like children’s clothing? Items sold include baby sized towels, muslin cloths, blankets

Payroll for UK employees going to work overseas and offshore remote workers

We are frequently asked to advise on the Income Tax and National Insurance treatment of UK employees who are being sent to work overseas, and employees who will work remotely from an offshore locat

Supply and Installation of Window Blinds

My client supplies blinds for windows and back in 2021, supplied and installed some blinds to houses at a new housing development before the houses were complete.

What if the Supplier has Charged UK VAT

Do I need to reverse charge VAT for any supply of services ((i.e., software from Apple, Microsoft, Adobe etc…) with no valid vat receipt (no GB vat number). Is any supply of services (i.e.

Are ‘as new’ goods classed as “second-hand goods” for the Second-Hand Margin Scheme?

My client buys high end, high value footwear, mainly trainers, from private sellers so does not incur VAT when he buys the footwear. However, he will only buy the footwear if they are still boxed a

FRS and transferring your VAT number

My client is a VAT registered sole proprietor who has been operating under the Flat Rate Scheme (FRS). His turnover is now around £200,000, and he has formed a new Ltd Co and transferred his busin

Vantage Fee Protect Customer Testimonials

Having changed over to Vantage a couple of years ago we have been very satisfied with the service. Especially the claims handling and technical advice lines for both our firm and insured clients on employment and business legal matters. The webshop Vantage offer allows our clients to join and pay electronically. This positively impacts our bottom line and makes things simple and efficient for our clients.

Linda Giles Chartered Accountant

Real people, real results

Vantage Fee Protect provide market leading Tax Fee Protection
Insurance schemes through accountants.

Don’t be shy,
get in touch

Vantage Fee Protect provide market leading Tax Fee Protection
Insurance schemes through accountants.

"*" indicates required fields

This field is for validation purposes and should be left unchanged.