I run a food outlet in a busy street. Im confused about the VAT on cold food and hot food. How do I price these. Should I ask people who come in whether they will eat in or take away even if they are buying from the cold food side of the store? I wonder what other big food companies like MacDonalds do this as their prices are not different between eat in vs take away? Thanks?
Hot food is subject to standard rate VAT anyway even if bought in a supermarket. Eating in vs. taking away only makes a VAT difference for some cold food- from VAT point of view eating in means you are buying catering services AND take away means you are buying food.
Most retailers/restaurants do not price these differently but they have a way of accounting for it differently for VAT purposes. So they charge £12 for cold food which can be either eaten in (VAT is £2) or taken away (VTA is nil). So to the retailer they make an extra £2 in taken away. No need for a separate invoice.
With regards to McDonalds, probably only the salads would come under the zero-rated if a customer takes away. McDonalds ask if you’re eat in or takeaway but don’t charge the price of the salads depending on the answer -the price is fixed.