VAT on takeaway food in the UK: a plain-English guide for owners (2026)

Short answer: yes, there is VAT on most takeaway food you sell hot. Hot takeaway food and hot drinks are standard-rated at 20%. Most cold takeaway food is zero-rated (0%), except items like confectionery, crisps, soft drinks and alcohol. Anything eaten on your premises is 20%, hot or cold. These rules only apply if you're VAT-registered.

This guide is for owners of takeaways, cafés, chippies, pizza shops and restaurants. It explains the HMRC rules in plain English, with £ examples. Everything is based on HMRC's own guidance, mainly VAT Notice 709/1 (last updated 8 June 2026).

Quick answer: which VAT rate applies?

Sources: HMRC Notice 709/1 sections 3 and 4, and Notice 701/14 sections 2.2 and 3. Always check the notice for edge cases.

Do you need to charge VAT at all?

Only if you're VAT-registered. You must register if your taxable turnover goes over £90,000 in any rolling 12 months. You must also register if you expect to go over £90,000 in the next 30 days alone. This threshold has applied since 1 April 2024. You can ask to deregister if turnover falls below £88,000.

Two things catch owners out:

• Zero-rated sales still count. "Taxable turnover" means everything you sell that isn't exempt. Your 0% cold sandwiches count towards the £90,000, just like your 20% hot food.
• It's a rolling 12 months, not your tax year. Check it every month.

If you're not registered, you don't charge VAT on anything. Your menu prices are simply your prices.

The hot food test: when is takeaway food "hot"?

Food is "hot" if it's above the ambient air temperature when you hand it over. HMRC then uses five tests. If any one applies, the food is standard-rated at 20% (Notice 709/1, section 4.3):

1. Heated to be eaten hot. You cooked or heated it so the customer can eat it hot. Fish and chips, curry and pizza all pass this test. HMRC says your purpose decides it, not the customer's.
2. Heated to order. You heat it when the customer asks. A toasted sandwich or panini is hot food.
3. Kept hot. It sits in a heated cabinet, on a hot plate, under a heat lamp or on a spit.
4. Hot-keeping packaging. You hand it over in packaging that keeps heat in, such as foil-lined bags.
5. Marketed as hot. Your menu, signs or website sell it as hot. "Hot rotisserie chicken" is caught.

If none of the five applies, cold takeaway food stays zero-rated.

Pasties, pies and "freshly baked" items

This is where the rules get subtle. Bakery items that are only incidentally hot can be zero-rated (section 4.4). Say you bake pasties and leave them to cool on a rack, and a customer buys one while it's still warm. That's usually zero-rated. Keep them under a heat lamp, or advertise them as "hot", and they become 20%. Calling something "freshly baked" doesn't make it hot by itself.

Microwaves for customers

If you give customers a microwave to heat their food, HMRC treats that food as hot. It's 20%, whether you charge for the microwave or not (section 4.5).

Hot and cold in one item

A single item with a hot part is hot as a whole. A hot dog, a bacon sandwich or a chip butty is 20%, even though the bread is cold (section 4.6).

Cold takeaway food: what's zero-rated and what isn't

Most cold food sold to take away is zero-rated: sandwiches, salads, wraps, sushi, bread, cakes and plain biscuits.

But some items are always 20%, even cold and to take away. HMRC calls these "excepted items" (Notice 701/14, section 2.2):

• confectionery, including chocolate bars and sweets
• biscuits fully or partly covered in chocolate
• ice cream and similar frozen products
• crisps, roasted or salted nuts and similar savoury snacks
• soft drinks, fruit juices and smoothies
• bottled water
• alcoholic drinks

Cakes are zero-rated, but chocolate bars aren't. Plain biscuits are zero-rated, but chocolate-covered ones aren't. Cold milk and milkshakes are zero-rated to take away.

Is there VAT on takeaway coffee?

Yes. Takeaway coffee is 20%. HMRC states that hot takeaway drinks are standard-rated (Notice 709/1, section 4.1). That covers tea, coffee, hot chocolate and any other hot drink. Coffee beans and tea bags sold as groceries are a different matter, but a cup of coffee over the counter is always 20%.

Eat-in vs takeaway: why where it's eaten matters

Food eaten on your premises is "catering". It's standard-rated at 20%, hot or cold (section 3.1). That's why the same cold sandwich can be 0% to take away and 20% to eat in.

Your "premises" are wider than your four walls (section 3.2). They include:

• your dining area and counter seating
• tables and chairs you put out on the pavement or forecourt
• seating in a food court that you share with other outlets

They don't include public seating provided for anyone, such as park benches.

What if customers can do either?

If cold food could be eaten in or taken away, you need to split your sales between the two (section 3.3). Most tills and ordering systems do this by asking "eat in or takeaway?" at the point of sale. Keep records, such as till reports, that back up your split.

Should eat-in prices be higher?

That's your choice. Many cafés charge the same price for both and accept a lower margin on eat-in sales. Here's what that costs you:

Example: a £4.50 cold sandwich that costs £1.60 to make.

• Takeaway (0%): you keep £4.50. GP is 64.4%.
• Eaten in (20%): you keep £3.75 and pay £0.75 VAT. GP is 57.3%.

Try your own numbers with our free GP calculator. It removes VAT before working out GP.

VAT on delivery charges

If you deliver the food yourself, your delivery charge follows the VAT rate of the food. HMRC treats it as one supply of "delivered goods" (VAT Notice 700/24, section 2.2). This applies even if you show the delivery fee on its own line.

Example: a hot pizza for £18.00 plus a £2.50 delivery charge.

• The pizza is hot food, so it's 20%.
• The delivery charge follows the pizza, so it's 20% too.
• Total £20.50 includes £3.42 VAT (£20.50 ÷ 6).

A few points to watch:

• Free delivery: VAT is due on the full sale price, at the rate of the food.
• Cold, zero-rated order with delivery: the delivery charge follows the food, so it's 0%.
• Mixed order (hot and cold food): HMRC's notice doesn't set out one method for splitting the delivery charge. Agree a fair split with your accountant.
• A separate delivery service: if someone else delivers under their own contract with the customer, their delivery charge is their own supply. A separate delivery service is always standard-rated.

Want to set a sensible delivery fee? Try our delivery fee calculator.

Meal deals and mixed orders

A meal deal often mixes 0% and 20% items for one price. HMRC says you must work out the VAT on each item (section 4.7). You can split the price using each item's cost or its normal selling price.

Example: a cold takeaway meal deal for £6.00.

The standard-rated items make up £0.70 of £2.20 in cost, which is 31.8%. So about £1.91 of the £6.00 is standard-rated. The VAT is about 32p (£1.91 ÷ 6). The other £4.09 is zero-rated.

If the meal deal includes any hot item, such as a hot burger with chips and a cold drink, the hot items are 20% anyway. Only the cold, zero-rated parts need splitting.

Small free extras, like ketchup sachets or salt, can be ignored (section 4.8).

VAT on Just Eat, Deliveroo and Uber Eats orders

The app takes the order, but you are still selling the food. That means:

1. You account for VAT on the food. Charge VAT on the full price the customer pays for your food, not on the smaller payout you receive.
2. The app charges VAT on its commission. Commission and fees carry 20% VAT. If you're VAT-registered on standard accounting, you can usually reclaim it as input VAT.
3. Delivery fees when the app delivers. If the app's riders deliver, check your partner agreement and payout statements to see who charges the customer's delivery fee. If it's the app's own charge, it isn't part of your sales.

Example: a customer pays £25.00 for hot food through Uber Eats, and your own driver delivers.

• Your output VAT on the food: £25.00 ÷ 6 = £4.17
• Uber Eats self-delivery commission at 13%, worked out on the VAT-inclusive price: £3.25, plus £0.65 VAT
• Payout to you: £25.00 − £3.90 = £21.10
• After paying £4.17 VAT and reclaiming £0.65: you're left with £17.58

Ask each app for proper VAT invoices for its fees. You'll need them to reclaim the VAT. See our Uber Eats commission guide, Just Eat commission guide and Deliveroo fees.

The Flat Rate Scheme for takeaways

Small businesses can use the VAT Flat Rate Scheme to keep things simple. You pay HMRC a fixed percentage of your VAT-inclusive turnover. In return, you can't reclaim VAT on most purchases.

• You can join if you expect VAT taxable turnover of £150,000 or less (excluding VAT) in the next 12 months.
• You get 1% off your flat rate in your first year of VAT registration.
• You must leave once your VAT-inclusive turnover goes over £230,000 (Notice 733).
• The flat rate applies to all your turnover, including zero-rated sales. If a lot of your sales are cold 0% food, the scheme may cost you more.
• You can't reclaim the VAT on app commission on the Flat Rate Scheme. You can only reclaim it on certain capital items over £2,000.

Example: a takeaway with £140,000 VAT-inclusive turnover pays 12.5% = £17,500 a year. In its first year, it pays 11.5% = £16,100. Whether that beats normal VAT accounting depends on how much of your food is hot and how much VAT you'd reclaim. Ask your accountant to run both.

Menu prices, receipts and records

• Show prices including VAT. The price you show consumers must be the final price, including VAT (Price Marking Order 2004).
• Give VAT receipts when asked. A VAT-registered business must give a VAT invoice to a VAT-registered customer who asks. For sales of £250 or less (including VAT), a simplified invoice is allowed (VAT Notice 700, section 16).
• Keep digital records. VAT-registered businesses must keep digital records and file returns with software that works with Making Tax Digital for VAT, unless HMRC has exempted them.
• Service charges and tips. A compulsory service charge takes the VAT rate of the meal. An optional service charge, or a tip a customer freely gives, is outside the scope of VAT (VAT Notice 700, section 8.14; Notice 709/1, section 2.3).
• Set up your till and online menu properly. Tag each item with its VAT rate, and ask "eat in or takeaway?" at the counter. Your online ordering system should do the same for collection, delivery and dine-in orders. In Menuthere you set 20% or 0% VAT on each item, and bills show the VAT.

Temporary 5% rate on children's meals (summer 2026)

From 25 June to 1 September 2026, a temporary 5% VAT rate applied to certain children's meals eaten on the premises (Revenue and Customs Brief 5/2026). Takeaway meals didn't qualify. That period has ended. Children's meals are back to the normal rules above. If you used the 5% rate, check your returns covered only eligible sales in those dates.

Common mistakes to avoid

1. Zero-rating hot food because "it's takeaway". Hot takeaway food is 20%.
2. Forgetting the outside tables. Food eaten at your pavement tables counts as eaten in.
3. Charging VAT on cold takeaway sandwiches. These are usually 0%. You may be overpaying.
4. Zero-rating cold soft drinks and crisps. These are always 20%.
5. Working out GP on VAT-inclusive prices. Use the ex-VAT price, or your margins look better than they are. Our GP calculator does it for you.
6. Netting off app commission. Account for VAT on what the customer paid, not on your payout.