VAT increase on take out coffee?

coopersim · 7 Jan 2011 at 10:53

I know it's petty, but it's bugging me!

Should VAT be charged on take out coffee in a work canteen. Ie. Coffee purchased in the canteen, but consumed out of the canteen?

Morba · 7 Jan 2011 at 10:54

lol! Ours has gone up in work also, 1p for tea and 2p for coffee.

The thing that annoys me most is that the profit margin on coffee and tea is crazy, they should be able to absorb the cost of the drinks imo.

Tom0 · 7 Jan 2011 at 10:54

The Canteen have paid VAT on buying the coffee in to make it. What does it matter where it's consumed?

deusexlumina · 7 Jan 2011 at 10:56

Morba said:
lol! Ours has gone up in work also, 1p for tea and 2p for coffee.

The thing that annoys me most is that the profit margin on coffee and tea is crazy, they should be able to absorb the cost of the drinks imo.

You should see the profiit margin on pepsi

Morba · 7 Jan 2011 at 10:59

I fancy boys said:
You should see the profiit margin on pepsi

from a post mix yes, but not many staff cateens have them

but then soft drinks have nothing on popcorn!

Morba · 7 Jan 2011 at 10:59

Tom0 said:
The Canteen have paid VAT on buying the coffee in to make it. What does it matter where it's consumed?

Yes, they have. However they will be making a lot more out of it than they are paying.

jak731 · 7 Jan 2011 at 11:00

When you buy tea or coffee 95% of the cost is the person you hand the money over to, even if you serve yourself at a machine. In my canteen tea is 80p, 80 teabags in a supermarket isn't much over a quid.

Unless they have to charge vat on the price you pay for it then the vat increase will be a small fraction of 1% increase in running costs for them.

mangobreeder · 7 Jan 2011 at 11:01

don't get me started.

Caffe Nero have increased the price of my morning coffee by 20p.

I have now stopped going, as they are just profiteering. 2.90 for a cup of coffee!!!!

jak731 said:
When you buy tea or coffee 95% of the cost is the person you hand the money over to,

not true, most of the money goes on rent.

csmager · 7 Jan 2011 at 11:11

Tom0 said:
The Canteen have paid VAT on buying the coffee in to make it. What does it matter where it's consumed?

Don't think they have:

http://www.legislation.gov.uk/ukpga/1994/23/schedule/8

Group 1 - Food is exempt

Excepted items:

4. Beverages - so standard rated.

Items overriding exceptions:

5. Coffee

So - Coffee is Zero Rated.

BUT, in the case of coffee bought from a coffee shop:

Go back to the top, food supplied "in the course of catering" is not exempt - this is defined in the later notes.

Vonhelmet · 7 Jan 2011 at 11:13

Tom0 said:
The Canteen have paid VAT on buying the coffee in to make it. What does it matter where it's consumed?

Unlikely, as there's no VAT due on coffee. (Technically it's zero rated, but go figure)

On hot, prepared coffee, however, there is.

EDIT: Beaten.

valve90210 · 7 Jan 2011 at 11:15

jak731 said:
When you buy tea or coffee 95% of the cost is the person you hand the money over to, even if you serve yourself at a machine. In my canteen tea is 80p, 80 teabags in a supermarket isn't much over a quid.

Actually you'd be surprised how little margint here is in things like tea and coffee!!!

My mother is the manager for a group of coffee shops and has to deal with all the ordering, pricing etc etc and there are so many factors that are taken into account in the pricing of everything, the margins are much tighter than you would think!

I can't remember all the details and figures off the top of my head but for a cup of tea for example you would take into account the cost of:

Tea Bag
Water (particularly if metered supply)
Electricty used to heat water/ keep it hot in Urn
Milk
Electricity used to run fridge to keep milk cold
Sugar

If it's a disposable cup there's the cost of the cup

If it's in a reusable mug/cup, there is the cost of washing it, including detergent, hot water etc etc

Valve

Amleto · 7 Jan 2011 at 11:47

if you order take out coffe from McD's, don't they drop the VAT?

coopersim · 7 Jan 2011 at 11:51

Amleto said:
if you order take out coffe from McD's, don't they drop the VAT?

That's what I thought, like when you go in to Pret they always ask if you're eating in or taking out - and they usually have a sign at the back saying why they ask, and it's all related to VAT charged if you eat in.... I just wondered if VAT is charged on drinks, specifically coffee?

Sp00n · 7 Jan 2011 at 11:52

Amleto said:
if you order take out coffe from McD's, don't they drop the VAT?

I thought they dropped the service charge, because you're not making a mess in the "restaurant" therefore there is no cleanup cost.

Morba · 7 Jan 2011 at 11:52

I thought costa only dropped the vat on food if taken out.

JBuk · 7 Jan 2011 at 11:52

valve90210 said:
Actually you'd be surprised how little margint here is in things like tea and coffee!!!

My mother is the manager for a group of coffee shops and has to deal with all the ordering, pricing etc etc and there are so many factors that are taken into account in the pricing of everything, the margins are much tighter than you would think!

I can't remember all the details and figures off the top of my head but for a cup of tea for example you would take into account the cost of:

Tea Bag
Water (particularly if metered supply)
Electricty used to heat water/ keep it hot in Urn
Milk
Electricity used to run fridge to keep milk cold
Sugar

If it's a disposable cup there's the cost of the cup

If it's in a reusable mug/cup, there is the cost of washing it, including detergent, hot water etc etc

Valve

per cup though i'd be suprised if each of those amounted to more than a penny each except for maybe the disposable cup

csmager · 7 Jan 2011 at 12:01

coopersim said:
That's what I thought, like when you go in to Pret they always ask if you're eating in or taking out - and they usually have a sign at the back saying why they ask, and it's all related to VAT charged if you eat in.... I just wondered if VAT is charged on drinks, specifically coffee?

They won't drop the VAT on coffee - only cold food. Yes, it's random. Yes, it's stupid. The rules on what is "in the course of catering" and therefore standard rated are in the lovely link I provided earlier. They are:

(a)any supply of [food] for consumption on the premises on which it is supplied; and
(b)any supply of hot food for consumption off those premises

(And food includes drink).

coopersim · 7 Jan 2011 at 12:14

csmager said:
They won't drop the VAT on coffee - only cold food. Yes, it's random. Yes, it's stupid. The rules on what is "in the course of catering" and therefore standard rated are in the lovely link I provided earlier. They are:

(a)any supply of [food] for consumption on the premises on which it is supplied; and
(b)any supply of hot food for consumption off those premises

(And food includes drink).

Cheers for clearing it up. I see now how they've worded it.

A case of Rip off Britain again

Vonhelmet · 7 Jan 2011 at 12:14

csmager said:
They won't drop the VAT on coffee - only cold food. Yes, it's random. Yes, it's stupid. The rules on what is "in the course of catering" and therefore standard rated are in the lovely link I provided earlier. They are:

(a)any supply of [food] for consumption on the premises on which it is supplied; and
(b)any supply of hot food for consumption off those premises

(And food includes drink).

Yep. If the food is cold and you take it out, then they have not added any value, so there is no VAT. If they heat up, say, a pie for you (ahoy Greggs) then they have added value, so there is VAT.

Likewise coffee. If you bought beans from them, there'd be no VAT. As soon as they grind the beans and add hot water and put it in a cup, they've added value.

Deleted member 651465 · 7 Jan 2011 at 12:55

How about this..

Buy a cold pie at a petrol station - zero rated
Buy a warm pie at a petrol station - full VAT
Buy a cold pie & a microwave / means of heating it yourself - zero rated

It's a minefield.

Edit: damn you von

VAT increase on take out coffee?

Deleted member 651465

Deleted member 651465