Why Cafes and Coffee Shops are at Risk of VAT Mistakes

is there VAT on coffee

Everyone in the UK is a frequent customer of coffee shops these days. Many of the customers ask the same question frequently from the coffee shop staff. Do you like to take a cold sandwich or a heated sandwich? Do you take black tea or white tea? Are you eating in or taking away your order? Some of the customers think that these questions are irrelevant, however, the reason for these questions will make you amazed. These questions are super relevant and a way to remain accurate with the tax details and dealing with the taxman as well. It is imperative to know here is their VAT on coffee.

Well, we have got you covered in this comprehensive guideline. This will help to gather information about what are VAT rules on the coffee-selling shops, how to avoid certain mistakes that can cause hefty fine payments, how to stop worrying, and what is VAT on takeaway food.


Do you aim to create accurate bookkeeping ledgers with the help of tech-savvy accountants at accounting firmsOr need a guide about ‘is there VAT on coffee’ in the UK? We can help!


Is There VAT on the Coffee-Selling Business?

Some of the services and products come under the category of zero-rated because of the fact these are essential goods. This means that no VAT is added on such products as they are classified as zero-rated. Cold sandwich is one of the famous examples of zero-rated items. However, there is one condition these cold sandwiches are eaten outside of the premises.

In the case you choose to eat inside the premises, you will have to pay higher rates for the same food item. The selling of these products is now subject to VAT on the standard rate. Now if you want to consume the heated sandwich, you will have to deal with the standard rate of VAT. In this scenario, this would not matter whether you take the sandwich within the premises or outside of it.


Why Worry About Being VAT Charged at a Coffee Shop?

When you are a general example of a single consumer of such products, there is no big deal to worry about the VAT charged on the products that you are planning to consume. However, in the case of businesses, this becomes a big deal in true meaning. The general rules that are implemented for VAT are very simple to understand, however, takes only a chance of charging VAT during lunch hours. The extravagant menus are complicated for the staff to deal with.

Moreover, this mostly happens because the members of staff do not ask the right and relevant questions from the customers. This involves the queries like Whether the customer is planning to take away the food or eat on the premises, whether the food is required heated or cold etc. These relevant queries will help to decide about the accurate charges of VAT charged on food items.


How Can You Avoid VAT Mistakes?

The main key to avoiding mistakes is to train the staff as soon as possible. As the staff is known to be the face of your business. The sales of your services an item is mainly processed by your staff embers also. The staff members should know the exact way to ask the questions of whether an order is subject to VAT or not.

The training of staff must be overly done as this can become a reason for the high turnover rate of the staff in your sector. You just pay close attention to the errors as the site owner. This is because during the investigation of HMRC, if mistakes are found, you will have to deal with hefty VAT  bills at the end of the day. This will cause damage to your business.


What are the VAT Rules for Takeaway food?

As coffee shops have turned into a trending business option in the UK, there are high chances that HMRC will pay close attention to the matter of your tax submissions and tax returns. Where the businesses are eager to claim for the VAT expenditures to recover the money spent on the purchase of items, HMRC is eager to know that is the level of accuracy in your procedure. The rules of VAT are really important to follow the path to accuracy.


The Bottom Line

Now that you have gathered a fair amount of information about ‘is there VAT on coffee’, we can bring the discussion towards wrapping up. The coffee shops and relevant businesses are trending in the UK, and so are the chances of mistakes in VAT. To keep avoiding these chances of mistakes, it is imperative to keep your staff trained about the relevant questions to be asked from the customers. This will help you to avoid the mistakes and hefty fines to be paid in the end. We hope these few minutes of reading have helped you better understand ‘is there VAT on coffee’ and how it is beneficial in the UK.


VAT rules on selling coffee become tricky when you have a higher chance of making an error in your tax returns. Our professional and detail-oriented accountants can help you! Get in touch with us.


Disclaimer: All the information provided in this article on ‘is there VAT on coffee’ in the UK, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.