Tax and Duty Manual VAT on Food and Drink – Wholesale/Retail

VAT treatment of food and drink supplied by

wholesalers and retailers

This document should be read in conjunction with paragraph 8 of Schedule 2 and

paragraph 3 of Schedule 3 to the VAT Consolidation Act 2010.

Document last updated September 2023

The information in this document is provided as a guide only and

is not professional advice, including legal advice. It should not be
assumed that the guidance is comprehensive or that it provides a
definitive answer in every case.

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Tax and Duty Manual VAT on Food and Drink – Wholesale/Retail

Table of Contents
Introduction ..................................................................................................................3

1. What is food? ....................................................................................................3

2. What products are taxable at the zero rate? ....................................................3

2.1. Milk and milk-based drinks.............................................................................3

2.2. Tea and Coffee................................................................................................4

2.3. Baby food........................................................................................................4

3. What products are taxable at the reduced rate? ..............................................4

3.1. Flour or Egg based Bakery Products ...............................................................4

3.2. Biscuits............................................................................................................5

4. What products are taxable at the standard rate? .............................................5

4.1. Savoury products............................................................................................6

4.2. Confectionery products ..................................................................................6

4.3. Drinks..............................................................................................................6

5. Vending Machines .............................................................................................7

6. Takeaways .........................................................................................................7

6.1. Rate of VAT applicable....................................................................................7

6.1.1. Combination meal deals ..............................................................................8

7. Summary Table..................................................................................................9

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Tax and Duty Manual VAT on Food and Drink – Wholesale/Retail

Introduction
This guidance sets out the VAT treatment of the wholesale or retail supply of food
and drink for human consumption.

For information on the VAT treatment of restaurant & catering services, bread and
food supplements please see Revenue’s guidance in the Tax and Duty Manuals on
Restaurant and Catering Services, Bread and Food supplements.

1. What is food?
Food includes all substances that are understood as ordinary food for human
consumption by the average consumer and are presented and labelled as such.
Ordinary food is not a medicine, medicated preparation, tobacco or a food
ingredient in cosmetics, tinctures, or similar.
Foods are ingested or chewed at meals or snacks for their nutritional value or for
their sensory attributes not limited to taste.

2. What products are taxable at the zero rate?

The zero rate of VAT applies to the supply of most foodstuffs, such as:
 most breads
 butter, cheese, eggs, milk
 baby food
 cereals
 condiments
 flour
 fruit (fresh, canned, dried and drained)
 herbs
 meat
 pasta
 pastes, sauces, soup, spices, sugar
 preparations and extracts derived from meat, yeast or eggs
 tea and coffee in non-drinkable form and
 vegetables (fresh and frozen).

2.1. Milk and milk-based drinks

Milk is liable to the zero rate of VAT. Revenue also allow milk alternatives to be zero
rated. Therefore, products such as oat milk, almond milk, soya milk, etc. are zero
rated as milk alternatives.

As a concession, Revenue allow milk-based drinks to be zero rated provided it is a

preparation derived from milk where the milk element itself represents more than

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Tax and Duty Manual VAT on Food and Drink – Wholesale/Retail

50% of the volume. The ingredients’ quantities must be verifiable. This concession
also applies to drinks based on milk alternatives.

However, the zero rating does not apply to any such product marketed specifically to
improve sporting or physical performance, such as an ergogenic aid. The standard
rate of VAT applies to such a product.

2.2. Tea and Coffee

The zero rate applies to the following products when supplied in non-drinkable form:
 Tea
 Herbal tea
 Preparations and extracts derived from tea
 Preparation and extracts derived from herbal tea
 Cocoa
 Coffee
 Chicory
 Other roasted coffee substitutes
 Preparations and extracts derived from cocoa
 Preparations and extracts derived from coffee
 Preparations and extracts derived from chicory
 Preparations and extracts derived from other roasted coffee substitutes.

2.3. Baby food

The zero rate applies to baby food or drinks which are marked and marketed as
suitable for babies. Otherwise, the standard rate applies.

3. What products are taxable at the reduced rate?

The reduced rate of VAT applies to flour or egg based bakery products, including
 cakes
 crackers
 wafers and
 biscuits
but excluding
 wafers and biscuits wholly or partly covered or decorated with chocolate or
some other product similar in taste and appearance,
 savoury products and
 chocolates, sweets and similar confectionery.

3.1. Flour or Egg based Bakery Products

The following are some of the characteristics of bakery products for VAT purposes:

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Tax and Duty Manual VAT on Food and Drink – Wholesale/Retail

 Flour or egg based.

 Dough is formed during manufacture.
 Usually baked or required to undergo baking.
Supplies of bread products that do not conform to the definition of bread are liable
to VAT at the reduced rate. Examples of some such products include croissants,
cheese-breads, cheese bagels, brioche and crispbread.
Doughnuts made by frying are considered to be bakery products and qualify for the
reduced rate.

3.2. Biscuits
To be considered a biscuit for VAT purposes, the value of moisture content of the
product must be no more than 12%. Products with more than 12% moisture are
considered to be cakes.
Biscuits wholly or partly covered or decorated with chocolate or some other product
similar in taste and appearance are liable at the standard rate.
Where an assortment of biscuits are sold together, the reduced rate will apply only if
the weight of the chocolate biscuits does not exceed 15% of the total weight of the
assortment. Otherwise, the standard rate applies.

3.3 Heated food and drink

The supply of food and drink that has been heated, has been retained heated after
cooking or is supplied while still warm after cooking, and that is above the ambient
air temperature at the time when it is provided to a customer is liable to VAT at the
reduced rate*. Typically, this includes hot tea, hot coffee and hot takeaway food.

*For the period from 1 November 2020 to 31 August 2023 such supplies were liable
to VAT at the second reduced rate.

4. What products are taxable at the standard rate?

The standard rate of VAT applies to certain items of food which are excluded from
the scope of the zero rate or the reduced rate, such as the following:
 Ice cream, frozen desserts, frozen yogurts and similar frozen products, and
prepared mixes and powders for making any such products or similar
products.
 Savoury products.
 Potato crisps/sticks/puffs and similar products made from potato, potato
flour or potato starch.
 Popcorn.
 Salted or roasted nuts.

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 Biscuits and wafers wholly or partly covered or decorated with chocolate or

similar product.
 All kinds of chocolates, sweets and similar confectionery.
 Glace and crystallised fruits.

4.1. Savoury products

Savoury products made from cereal or grain, or from flour or starch derived from

cereal or grain, pork scratchings, and similar products when supplied for human
consumption without further preparation are liable to VAT at the standard rate.
Such products are not limited to those that are baked or cooked and there is no
exclusion for “healthy” products. Neither is there any weight or ingredient specified
to classify a product as savoury. These types of products are diverse in size,
seasoning and the levels of salts, sugars and fats.
However, products that fall into this category are generally snack foods that have the
following characteristics:
 they are savoury
 they are eaten and marketed as a snack
 they are made from grains, flour or animal fats/products
 they are consumed without any further preparation
 they are typically sold in small packets
 they are eaten with the fingers.
Some examples include vegetable crisps, prawn crackers, poppadoms, savoury
biscuits or savoury crackers.

4.2. Confectionery products

Confectionery is an umbrella term that encompasses the vast spectrum of
confectionery products which can have some or all of the following characteristics:
• sweet to the taste
• eaten with the fingers
• shaped like a bar or a shape that is typical of confectionery products
• the method of packaging is similar to other confectionery products
• eaten as a snack.

This list is not exhaustive.

4.3. Drinks
The standard rate of VAT applies to most drinks such as the following:
 alcohol
 bottled drinking water
 soft drinks
 juice extracted from and other drinkable products derived from fruit

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 juice extracted from and other drinkable products derived from vegetables
 syrups, concentrates, essences, powders, crystals or other products for the
preparation of beverages.

5. Vending Machines
The supply of food and drink by means of a vending machine is a supply of goods and
the VAT rate applicable is that which would normally apply to the good.

6. Takeaways
The supply of takeaway food and drink from a fixed establishment or a mobile snack
bar are generally considered a supply of goods rather than the provision of
restaurant services.

The following factors may indicate that the supply is not a restaurant service:

• no waiters
• no real advice to customers
• no table service
• no enclosed spaces at an appropriate temperature for the
consumption of food served
• no cloakrooms or lavatories
• no crockery, furniture or place settings and
• the lack of other service elements.

Additional services such as counters enabling a limited number of customers to eat

on the spot where there is negligible human intervention will not alter the nature of
the supply.

6.1. Rate of VAT applicable

The supply of hot takeaway food is liable to VAT at the reduced rate*. This includes
food heated, retained heated or supplied while still warm. Hot sandwiches include
hot/toasted bread, bagels, baguettes, paninis and wraps and also include cold bread,
bagels, baguettes, paninis and wraps that contain hot fillings.

The supply of cold takeaway food is liable to VAT at the zero rate. Chilled, cold or
frozen cooked meals are liable to VAT at the zero rate. Cold sandwiches include cold
bread, bagels, baguettes, paninis and wraps.

Cold food supplied with hot food for an inclusive price (for example, coleslaw with
hot chicken) is liable to VAT at the reduced rate*.

Supplies of alcohol, bottled waters, soft drinks, sports drinks, vegetable juices and
fruit juices are liable to VAT at the standard rate.

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Tax and Duty Manual VAT on Food and Drink – Wholesale/Retail

*For the period from 1 November 2020 to 31 August 2023 such supplies were liable
to VAT at the second reduced rate.

6.1.1. Combination meal deals

Meals of this type consist of items liable at different rates of VAT, typically being hot
food liable at the reduced rate together with a soft drink liable at the standard rate,
which are sold together for a single consideration, usually at a discount. Such a
discount should be apportioned between the individual items of the meal at their
appropriate rates of VAT. For further information please see Revenue’s guidance on
Mixed supplies of goods and services.

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Tax and Duty Manual VAT on Food and Drink – Wholesale/Retail

7. Summary Table
Retail / Takeaway
Type of Food or Drink
Wholesale
Alcohol, bottled waters, soft drinks, sports
Standard Standard
drinks and vegetable juices
Bread, butter, sugar etc (off the shelf produce) Zero n/a
Cakes, biscuits (other than chocolate covered
Reduced Reduced
biscuits)
Chocolates, Confectionery, Crisps, Ice cream,
Standard Standard
Biscuits - chocolate covered
Coffee, Tea (Hot) Reduced Reduced
Coffee, Tea (non-drinkable form) Zero n/a
Reduced & Reduced &
Coffee, Tea (Hot) with confectionery
Standard Standard
Coffee, Tea (Hot) with scone/ cake
Reduced Reduced
Cold Sandwich Zero Zero
Hot Sandwich Reduced Reduced
Fish, Chips (Frozen or uncooked) Zero n/a
Fish, Chips, Burgers (Hot) Reduced Reduced
Reduced & Reduced &
Fish and Chips with soft drink
Standard Standard
Fruit juices Standard Standard
Take-away Food (Hot) Reduced Reduced
Take-away Food (Cold) Zero Zero
Vinegar Zero Zero