Guide · money and the law
Restaurant VAT in the UK: eating in, hot takeaway and cold food explained
Food is not simply VAT-free in the UK, and a restaurant meal never is. HMRC's catering notice answers three questions in turn: is the food eaten on your premises, is it hot, and is it one of the items that carry VAT whatever happens. Here they are, with the meal deal and the service charge after them.
Published · A practical guide for restaurants in the UK, from HMRC's VAT Notice 709/1. Not tax advice: your accountant decides how your own sales are treated.
The short version
The standard rate of VAT in the UK is 20%, and it is the rate a restaurant meets most. Food and drink supplied in the course of catering is standard-rated, and HMRC's notice says plainly that a supply of food and drink for consumption on the premises is always charged at the standard rate. The plate of fish and chips eaten at your table carries VAT, and so does the cup of tea beside it.
Takeaway is where it divides. Hot takeaway food is standard-rated. Cold takeaway food and drink is zero-rated, unless it is of a type that is always standard-rated — crisps, sweets and some drinks, bottled water among them. So the same sandwich can be zero-rated at the counter and standard-rated at the table, and a toasted one is standard-rated either way.
What counts as "your premises"
Section 3.2 of the notice defines premises widely. It is any area set aside for your customers to eat, whether or not other businesses' customers use it too. For a restaurant that includes the tables and chairs on the pavement or concourse next to it, and for a unit in a shopping centre it includes the shared seating of a food court.
The line is drawn at seating provided for the general public. A bench in the square that anyone may sit on is outside the definition; a table you put out for your own customers is inside it. If you have recently been given a pavement licence, the tables it lets you put outside are, for VAT, part of the restaurant.
Where you cannot tell at the point of sale which treatment applies, section 3.3 asks you to keep evidence that supports a fair and reasonable apportionment. The guest who asks for a takeaway and then sits down at a table is a case the notice leaves open; how your staff should handle it is a question for your accountant, and the answer belongs in your training rather than with whoever happens to be on the counter.
Hot or cold: HMRC's tests
Takeaway food is hot for VAT when it is hot at the moment it is handed over — the notice calls this the precondition — and it meets at least one of five tests in section 4.2. "Hot" means above the ambient air temperature, and it is the supplier's purpose in heating the food that decides, not what the customer does with it (section 4.3).
- 1
Heated so it can be eaten hot
Food you heat for the purpose of the customer eating it hot is hot food, even if they let it cool.
- 2
Heated to order
The toastie made when it is ordered, the pie warmed when it is asked for.
- 3
Kept hot after heating
Food held in a hot cabinet or under a lamp after cooking.
- 4
Packed to stay hot
Food handed over in packaging designed to retain heat.
- 5
Sold as hot
Food advertised or marketed in a way that says it is supplied hot.
Two details catch restaurants out. A microwave made available to takeaway customers turns their food into a supply of hot food, standard-rated, whether you charge for the oven or let customers use it free (section 4.5). And hot food sold as a single item with a cold ingredient — a burger with cold salad in it — is standard-rated as a whole (section 4.6).
Cold takeaway, and the items that always carry VAT
Cold takeaway food and drink is zero-rated unless it is a type that is always standard-rated. The catering notice names crisps, sweets and some drinks, including bottled water, and points to HMRC's Notice 701/14 for the full list. In a restaurant that sells over the counter, the usual standard-rated lines are soft drinks, alcohol, confectionery, crisps and ice cream; the salad box, the cold sandwich and the slice of cake to take away are where zero-rating usually applies.
Cold food eaten at your tables is standard-rated like everything else on the premises. The zero rate belongs to the bag, not to the dish.
Meal deals and set prices
A single price for several items is a mixed supply when each item can also be bought separately from your menu, and the notice's own example is a burger, chips and a milkshake sold for takeaway (section 4.7). The price has to be split between the standard-rated and zero-rated parts on a basis you can defend, and the method is worth agreeing with your accountant before the menu goes to print. Items you give away with no charge of their own, such as salt, vinegar or mustard, can be ignored (section 4.8).
Catering for an event — a wedding reception, a party, a conference lunch — is supplied in the course of catering and is standard-rated as a whole (sections 2.1 and 2.2), wherever the guests eat it.
One more date for the records: the notice carries a banner about a temporary reduced rate for certain children's meals, from 25 June 2026 to 1 September 2026. If you sold children's meals in those weeks, read HMRC's own brief on which supplies it covered before you file.
The service charge and the tip
Section 2.3 is short. A service charge you make is standard-rated, so it carries VAT like the meal. A tip the guest freely gives above your total charge is outside VAT. The notice does not say how a charge the guest may decline is treated, so decide that with your accountant before you print the word "optional".
Whatever the VAT, in Great Britain the Tips Act requires the service charge and the tips that reach the business to go to your staff, shared fairly by a written policy; the Act does not extend to Northern Ireland (section 13). Our guide to the Tips Act and our guide to splitting the bill take that part further.
What the menu and the bill have to know
The rate is your accountant's decision. The system's job is to remember it, dish by dish, and to show it on every bill.
- In Slotina each dish and drink on the menu carries the VAT class you give it — the class, not a rate typed onto every dish — so set the classes up once with your accountant.
- The bill at the table shows VAT by class for UK and Irish restaurants, whether the table pays as one check or splits by dish, by seat or into equal shares.
- Collection orders come from your own ordering page for a pickup time today and use the same menu, so each dish keeps the one VAT class you gave it. A dish whose rate differs between eating in and taking away is one to settle with your accountant before you set its class.
- The sales reports export daily takings and VAT by class as CSV files for your accountant, and the screen says plainly that it is not a tax return.
Restaurant VAT in the UK: short answers
Is restaurant food VAT-free in the UK?
No. Food and drink eaten on the premises is always standard-rated, at 20%. Only cold food taken away can be zero-rated, and even then crisps, sweets and some drinks stay standard-rated.
Is VAT charged on hot takeaway food?
Yes. Takeaway food that is hot when handed over and meets one of HMRC's tests — heated to be eaten hot, heated to order, kept hot, packed to stay hot or sold as hot — is standard-rated.
Do pavement tables count as eating on the premises?
Yes. HMRC's notice includes tables and chairs on the pavement or concourse next to a restaurant that are provided for its customers. Seating for the general public is outside it.
Does a service charge carry VAT?
A service charge you make is standard-rated. A tip the guest freely gives above your total is outside VAT. Ask your accountant how an optional charge on your bills is treated.
Sources (checked 4 November 2026; not tax advice)
Restaurant EPOS with VAT by class on the bill · Click and collect from your own page · Pricing