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Fair play on VAT

The NFFF has been campaigning long and hard about the VAT issue, raising awareness of this unjustified burden on fish and chip shops ever since its introduction in the early 1980's.

Working with leading professional services firm KPMG, our primary argument is that hot take-away food should be zero rated for VAT, but that will be a long and hard fought battle.

Our secondary argument is that there should be a level playing field. Why should the UK's fish and chip shops have to pay 20% on all the hot food they sell, including chicken and pies, when the bakery next door sells hot pies, pasties and sausage rolls FREE OF VAT? Also, why is the supermarket along the street allowed to sell hot chicken, potato wedges and a variety of pies and pasties FREE OF VAT?

2012 Budget Announcement

Having said that, in the 2012 Budget these anomalies were challenged and HMRC issued a consultation document called 'VAT: Addressing borderline anomalies'.

Two of those proposed changes challenge the current zero rating on freshly baked bread, pies, pasties, sandwiches as well as the notorious supermarket rotisserie chicken. If implemented (this is a discussion document), the changes will help to provide the 'level playing field' that the NFFF has been campaigning for.

The two proposed changes are as follows:-

1. Hot takeaway food now will be defined as that which is above "ambient room temperature" when it is provided to the customer. This changes the definition from the food being heated "for the purposes" of it being consumed above ambient room temperature.

This removes the argument which is sometimes used which is that the food is hot but is not sold for the purpose of being consumed hot for example, it's just kept hot for food hygiene regulations or to show that it's "freshly baked".

2. "Premises" will be more tightly defined. This definition is important for establishing whether cold food is eaten on the premises (standard rated) or taken away (zero rated).

As of yet these changes are still at the proposal stage.

The opportunity

Fairplay on VATTo support our campaign we are presenting a significant opportunity for NFFF members to make a protective claim for overpaid output VAT plus interest on sales of fish and chips in the last four years.

Latest Update on KPMG


The prospects of success of the argument for zero rating being applicable to hot takeaway food sales are now very low to nil. This is because Sub One Limited, a Subway franchisee has repeatedly lost its case regarding zero rating being applicable to hot takeaway food sales at the Tax Tribunals and Court of Appeal. The Supreme Court has also refused Sub One permission to appeal.


The NFFF member claims have been stayed behind the Sub One case as have other claims by our clients in the sector. Given that Sub Oneís arguments have failed, we do not currently have another client who is willing to pursue litigation further on the same points.