Jul 2012 - Issue 5 - National Federation of Fish Friers

THE fish friers REVIEW
Cod Knows!
Tackling the issues that matter to our industry
Understanding the recent
government revision to VAT
on hot takeaway food
The Budget announcement in April this year that VAT was to be
applied to hot pies and pasties created uproar. The media
frenzy was unbelievable and they even tried to pit us against
Gregg’s the bakers on the side of the Government. Although
we were delighted that bakeries and supermarkets were to
lose their unfair commercial advantage over fish and chip
shops, this wasn’t really the result we hoped for, and the last
thing our industry needs is the consumer pointing the finger
at us for bringing these anomalies to the Government’s
attention in the first place.
The bakers, supermarkets and other groups lobbied the
Government, who very quickly saw that their proposal would
actually be totally impossible for HMRC to police. Yet another
gaffe by the Government that strengthens our argument that the
legislation is an absolute mess and it’s high time that it was
completely overhauled, and that it is illegal that hot food
takeaways are subject to VAT at all.
Anyway, the Government has NOT totally backed down to the
bakers and supermarkets. What they have done is to look at the
proposed legislation and to CLARIFY it.
Under the new proposal, VAT will be applied at the standard
rate to hot food which is:
Provided hot for the purpose of allowing it to be eaten hot
(existing rules)
Cooked, heated or reheated to order (e.g. toasted
sandwiches)
This will apply to a multitude of items
OR
Kept hot, or where the natural cooling process is delayed
(anything kept in hot cabinets, hot plates, under heat lamps, in
a bain-marie etc or where heat is applied to slow the cooling
process will be subject to standard rate VAT)
16
By Denise Dodd, General Secretary
Cornish pasties and sausage rolls would be zero-rated where
they are cooling naturally on racks, but not when they are stored
in a heat cabinet
OR
Provided in heat retaining packaging or other packaging
specifically designed for hot food (for example foil lined
takeaway packaging)
Supermarket hot deli counters – remember the packaging we
featured back in Issue 8 2010? Your supermarket hot chickens
etc. will no longer enjoy immunity
Advertised, marketed or promoted in any way that
indicates that it is supplied as hot
Hot pies, hot pasties, hot sausage rolls, hot roast chicken – the
list is endless, but if it says HOT on the sign – it’s subject to VAT.
This all comes into force from 1st October 2012 and I think
you’ll agree that this is not exactly a complete victory for your
bakers and supermarkets. HMRC will also have them under the
spotlight to ensure they are fully complying with these new rules.
The tide is beginning to slowly shift and the consumer is now
much more aware that 20% of the price they pay for their fish
and chips goes directly to the Government. But 20% of the price
they pay for that supermarket chicken or potato wedges will also
soon be going to the Government, which although it’s still not
right, it is still a little more fair.
There is still plenty of work still to be done and we urge you as
members to help us with this fight. If you haven’t already spoken
to KPMG about the NFFF VAT Campaign and submitted
protective claims, then at least discuss it with your accountant.
To offer your opinion or support please contact us on
yoursay@federationoffishfriers.co.uk