VAT on takeaway food: hot, cold and eat-in ​

The same sandwich can carry 0% VAT or 20% VAT. It depends on whether it is hot, whether the customer eats it on your premises, and how you sell it. HMRC sets the rules out in VAT Notice 709/1 (last updated 8 June 2026). This guide walks through them for a restaurant, café or takeaway, with the section numbers so you can check each point yourself.

Eat in or take away ​

If you supply food and drink to be eaten on your premises, VAT is charged at the standard rate, whether the food is hot or cold (section 3.1).

“Premises” means more than your own dining room (section 3.2). It covers the areas you occupy and any area set aside for your customers to eat, including tables and chairs in a food court you share with other food businesses. It does not cover seating provided for the general public, such as benches in a shopping centre.

In practice, this means that a cold item, like a sandwich, a salad or a cake, can be 20% when the customer sits down with it and 0% when they take it away. Your staff need to know which it is when they ring it up, so “eat in or take away?” is a VAT question as well as a service one.

When takeaway food counts as hot ​

Takeaway food is standard-rated if it is hot when you hand it over, meaning above the temperature of the air around it, and it meets any one of five tests (sections 4.2 and 4.3):

1. Heated so it can be eaten hot. It was cooked, reheated or kept warm so the customer can eat it hot, as with a kebab or a portion of chips.
2. Heated to order. It was heated because the customer asked for it, such as a toasted sandwich.
3. Kept hot. After cooking, it was kept in something that keeps it hot or slows cooling, such as a heated cabinet or a heat lamp.
4. Hot-food packaging. It is handed over in packaging that keeps the heat in, or packaging specifically designed for hot food.
5. Sold as hot. It is advertised or marketed in a way that says it is hot. Describing something as “freshly baked” does not count on its own.

The tests look at how the food is actually heated, kept, packed and sold, and the way you advertise it is one of them. A pasty that has cooled to room temperature on a shelf and is sold in a paper bag can be zero-rated. The same pasty kept under a heat lamp, or advertised as hot, can be standard-rated. Section 4 of the notice works through cases like these.

Meal deals and mixed orders ​

If one inclusive price covers standard-rated and zero-rated items, you have to split the price between them to work out the VAT. HMRC allows you to do this on the basis of cost or of market value (section 4.7). Its example is a burger, chips and a milkshake. Pick a method you can explain and use it consistently. Our takeaway VAT calculator splits a meal deal by selling prices, and checks the rate of a single item.

This is different from a single hot item with a cold ingredient, such as a hot filled roll with cold salad inside. That is one supply, and the whole item is standard-rated (section 4.6).

Delivery ​

HMRC’s notice gives delivery of cooked, ready-to-eat food or meals as an obvious example of catering (section 2.1), and catering is standard-rated. A curry you deliver is standard-rated. Cold food is less clear-cut: the same section says retail supplies of cold takeaway food are not catering, and a contract to supply food, for an event say, makes the whole supply standard-rated (section 2.2). If you deliver cold food in any volume, ask your accountant which side of the line you are on.

What your till has to get right ​

• The right rate on every item. Hot food, hot drinks, cold food, soft drinks and alcohol are not all the same rate. Go through the menu once, item by item, with the notice open.
• Eat in or take away, at the moment of sale, for anything whose rate changes with it.
• VAT split by rate in your daily figures. Making Tax Digital for VAT asks you to keep a digital record of the rate charged on each sale and your sales split by rate (VAT Notice 700/22, section 3.3.2). See our Making Tax Digital guide.
• A record you do not have to rebuild. If HMRC asks how you arrived at a figure, the day’s Z-report should show it.

How this works in Yumee POS ​

In Yumee POS the VAT rate is set on each item on your menu, and the Z-report splits VAT by rate. Z-reports are numbered and locked once issued and download as a PDF, and your accountant can download the figures for Xero, QuickBooks, Sage or FreeAgent. The rate belongs to the item, not to the order type. If you sell the same item to eat in and to take away at different rates, it is set up as two items, one for each rate, and your staff choose the right one at the till.

Filing the VAT return stays with you or your accountant.

Sources ​

• HMRC, Catering, takeaway food (VAT Notice 709/1), last updated 8 June 2026: sections 2.1–2.2, 3.1–3.2, 4.1–4.3, 4.6–4.7.
• HMRC, Food products (VAT Notice 701/14): which foods and drinks are always standard-rated.
• HMRC, Making Tax Digital for VAT (VAT Notice 700/22): section 3.3.2.

This guide is general information, not tax advice. For a specific product or way of selling, check the notice or ask HMRC or your accountant.