If you run a restaurant, café or takeaway in the UK, VAT is one of the easiest taxes to get quietly wrong — and one of the most expensive. The same sandwich can be zero-rated, or charged at 20%, depending on whether the customer eats it in, takes it away cold, or takes it away hot. Get the split wrong across thousands of transactions and you're either handing HMRC money you didn't need to collect, or building up a bill you can't see coming.
This guide explains, in plain terms, how VAT applies to food in a UK restaurant or takeaway: the rates, why eat-in and takeaway are treated differently, what counts as "hot food", which cold items are always standard-rated, and the 2026 rules you need to know — including a temporary relief that ends on 1 September 2026.
Key takeaways
- The UK has three VAT rates: standard 20%, reduced 5%, and zero 0% (GOV.UK). Most restaurant food sits at either 20% or 0%.
- Eat-in food is always standard-rated (20%) — everything eaten on your premises counts as catering (GOV.UK, VAT Notice 709/1).
- Cold takeaway food is usually zero-rated (0%) — unless it's an item that's always standard-rated (GOV.UK, VAT Notice 709/1).
- Hot takeaway food is standard-rated (20%) if it meets any one of five HMRC tests (GOV.UK, VAT Notice 709/1).
- Some cold items are always 20% even to take away: confectionery, crisps and savoury snacks, ice cream, soft drinks and mineral water, sports drinks, and alcohol (GOV.UK).
- You must register for VAT once taxable turnover passes £90,000 (threshold since 1 April 2024) (GOV.UK).
- A temporary 5% rate applies to children's meals eaten on the premises from 25 June to 1 September 2026 inclusive — then it ends (GOV.UK).
What VAT rate do restaurants charge in the UK?
There are three VAT rates in the UK: a standard rate of 20%, a reduced rate of 5%, and a zero rate of 0% (GOV.UK). For food served by restaurants and takeaways, the two that matter day to day are 20% and 0%.
The rate isn't fixed to the food — it's fixed to how the food is supplied. The same item can carry a different rate depending on whether it's eaten in, taken away cold, or taken away hot. That's the whole reason VAT trips operators up: your till has to know the context, not just the product.
As a quick reference, here's how the three most common situations break down:
| How it's supplied | VAT rate | Example |
|---|---|---|
| Eaten in / on the premises (catering) | 20% | A burger and chips eaten at a table |
| Cold takeaway | 0% (usually) | A cold sandwich or salad to go |
| Hot takeaway | 20% | Hot chips, a hot pie, a rotisserie chicken to go |
The rest of this guide unpacks each row — starting with why eat-in is the simplest case.
Is eat-in food always standard-rated?
Yes. Any food or drink you serve to be eaten on the premises is treated as catering, and catering is standard-rated at 20% (GOV.UK, VAT Notice 709/1). It doesn't matter whether the item would be zero-rated if sold cold to take away — the moment it's eaten in, it's 20%.
The catch is what "premises" means. HMRC defines it as the areas occupied by the food retailer, or any area set aside for your customers to consume food (GOV.UK, VAT Notice 709/1). In practice that includes:
- Your indoor seating.
- Tables and chairs on the pavement or forecourt that belong to you.
- Shared seating in a food court that's set aside for customers of the outlets around it.
General public seating that isn't set aside for your customers — a bench in a park, or communal seating you have nothing to do with — isn't your "premises". If a customer buys a cold sandwich and walks off to eat it on a public bench, that's a takeaway sale, not catering.
Do you charge VAT on takeaway food?
It depends on temperature. Cold takeaway food is usually zero-rated, and hot takeaway food is standard-rated at 20% (GOV.UK, VAT Notice 709/1).
So a cold wrap, a cold salad box, or a cold sandwich to go is normally 0% — you don't add VAT. But heat that same wrap up to serve it hot, and it becomes standard-rated. This is why chicken shops, bakeries and cafés often ring the "hot" and "cold" versions of near-identical products through at different rates.
There's an important exception, though: some cold items are never zero-rated (covered below). And "hot" has a precise legal meaning, which is where most disputes start.
What counts as "hot food" for VAT?
Food is treated as hot — and therefore standard-rated at 20% — if it's hot when you sell it and it meets any one of five tests. HMRC says food is standard-rated if it has (GOV.UK, VAT Notice 709/1):
- Been heated so it can be eaten hot — cooked or reheated for the purpose of being consumed hot.
- Been heated to order — for example, a toastie made when the customer asks.
- Been kept hot after heating — held in a hot cabinet, under heat lamps, or on a hot plate.
- Been provided in heat-retaining packaging, or packaging specifically designed for hot food — foil-lined bags, insulated boxes.
- Been advertised or marketed as being supplied hot — your menu or signage says it's served hot.
You only need to satisfy one of these for the food to be standard-rated. This is the classic "pasty tax" territory: a loaf of freshly baked bread left to cool naturally is zero-rated, but the same product kept hot in a cabinet to sell warm is 20%. The distinction is whether you're keeping it hot for the customer, not just that it happens to still be warm from the oven.
Which cold items are always standard-rated?
Some products carry 20% VAT even when they're cold and sold to take away — because the item type itself is excluded from zero-rating. HMRC lists these "always standard-rated" categories (GOV.UK):
- Confectionery — chocolate bars, sweets, and (for VAT purposes) most cereal and cake-style bars.
- Crisps and savoury snacks — crisps, and similar snacks made from potato or cereal.
- Ice cream — and similar frozen products.
- Soft drinks and mineral water — including bottled water.
- Sports drinks.
- Alcoholic drinks.
So a cold bottle of cola or bottled water sold alongside an otherwise zero-rated cold sandwich still needs VAT added. A meal deal that mixes a zero-rated sandwich, a standard-rated drink and a standard-rated packet of crisps has to be apportioned across the different rates — which is exactly the kind of detail an EPOS system should be set up to handle for you.
How does this play out on a real menu?
Take a café selling one product — a cheese toastie — in three ways. The VAT changes each time:
| Sale | Hot or cold | Where | VAT rate |
|---|---|---|---|
| Toastie eaten at a table | Hot | Eat-in | 20% |
| Toastie made hot to take away | Hot | Takeaway | 20% |
| The same cheese sandwich, cold, to take away | Cold | Takeaway | 0% |
The lesson: your point of sale needs to capture eat-in vs takeaway and hot vs cold as distinct choices, because HMRC treats them as distinct supplies. If your till defaults everything to one rate, you're almost certainly getting it wrong somewhere — and misclassifying eat-in sales as zero-rated takeaway is the error most likely to catch up with you at inspection.
Is there a temporary 5% VAT rate on children's meals in 2026?
Yes — but it's time-limited. From 25 June 2026 to 1 September 2026 inclusive, a temporary reduced rate of 5% VAT applies to children's meals consumed on the premises, where the food forms part of a children's meal (GOV.UK).
Two conditions matter. First, it's on-premises only — a takeaway children's meal doesn't qualify, because the relief is written around food "for consumption on the premises". Second, the meal must be, in HMRC's words, "only held out for sale as a meal for a child" (GOV.UK) — so a smaller portion of an adult dish, or a discounted adult meal, isn't automatically covered.
Crucially, this relief ends on 1 September 2026. If you're reading this after that date, children's meals revert to the normal rate (20% eat-in). Don't confuse this measure with the separate Covid-era hospitality cut of 2020–2022 — that was a different, temporary reduction that has long since ended.
When does a restaurant have to register for VAT?
You must register for VAT once your taxable turnover exceeds £90,000 in any rolling 12-month period, or if you expect to pass it in the next 30 days. The £90,000 registration threshold (and the £88,000 deregistration threshold) have applied since 1 April 2024, up from £85,000 and £83,000 before that (GOV.UK).
For a busy independent, £90,000 of turnover isn't a lot — it's roughly £1,730 a week. Plenty of single-site restaurants and takeaways cross it, at which point you're charging VAT on your standard-rated sales and reclaiming VAT on your costs. Below the threshold you can still register voluntarily, which can be worth it if you buy a lot of standard-rated supplies. Registration is a genuine business decision, not just a compliance box — like your business rates bill, it's a fixed cost of trading you need to plan around rather than discover.
Will the hospitality VAT rate be cut?
Not as things stand. Trade body UKHospitality is campaigning for a permanent reduced VAT rate of 10% for hospitality, under its "VAT's the Problem" campaign, arguing it would bring the UK closer to rates in France, Spain and Italy (UKHospitality). But that is a campaign ask, not the law — hospitality food eaten in remains standard-rated at 20%.
It's worth watching, because a lower hospitality rate would materially change the maths on eat-in margins. For now, though, plan on 20% for everything you serve to eat in, and don't build a cashflow forecast on a cut that hasn't happened.
How VAT quietly eats your margin — and what you can control
VAT isn't a cost you can negotiate away like a supplier price, but the way you classify and structure sales absolutely affects what you keep. Three practical points:
- Get the eat-in/takeaway and hot/cold split right at the till. Under-charging VAT (treating eat-in as zero-rated) builds a hidden liability; over-charging makes you dearer than the shop next door. Both cost you.
- VAT stacks on top of every other rising cost. It sits alongside wages, energy and rent, and on top of the commissions you pay to third parties. If you want to protect what's left, the biggest single lever is usually the money leaking out the sides — see our guide to the delivery-app mistakes UK restaurants make and how to control your food costs.
- The channel you sell through changes the take-home, not the VAT. VAT is the same whether an order comes through a delivery app or your own site — but a delivery platform also takes a commission of up to a third on top. Taking more orders through your own online ordering page doesn't cut the VAT, but it keeps the commission that would otherwise disappear on the same sale.
Getting VAT right is defensive: it stops HMRC surprises and stops you leaving money on the table. Getting the rest of your cost stack right is where you actually rebuild margin.
Frequently asked questions
Do you charge VAT on takeaway food in the UK?
Cold takeaway food is usually zero-rated (0%), so no VAT is added. Hot takeaway food is standard-rated at 20%. Some cold items — like crisps, confectionery and soft drinks — are always 20% even to take away (GOV.UK, VAT Notice 709/1).
Is hot takeaway food VATable?
Yes. Hot takeaway food is standard-rated at 20% if it's hot when sold and meets any of HMRC's five hot-food tests — for example, heated to order or kept hot in a cabinet (GOV.UK, VAT Notice 709/1).
What's the VAT difference between eat-in and takeaway?
Eat-in food is always standard-rated at 20% because it counts as catering. Cold takeaway food is usually zero-rated. So the same cold sandwich can be 0% to take away but 20% if eaten at your table (GOV.UK, VAT Notice 709/1).
Why is a hot pasty standard-rated but a cold one isn't?
If a baked item is kept hot to sell, or heated so it can be eaten hot, it's standard-rated at 20%. A pasty left to cool naturally and sold cold is zero-rated. The test is whether you're keeping it hot for the customer (GOV.UK, VAT Notice 709/1).
Do I charge VAT on bottled water or fizzy drinks?
Yes. Soft drinks, mineral water, sports drinks and alcohol are always standard-rated at 20%, even cold and to take away (GOV.UK).
What VAT rate applies to delivery orders?
The same rules apply as for takeaway: hot food delivered is standard-rated at 20%, cold food is zero-rated unless it's an always-standard-rated item. VAT is charged on the food regardless of which app the order comes through (GOV.UK, VAT Notice 709/1).
When do I have to register for VAT?
Once your taxable turnover exceeds £90,000 in a rolling 12-month period, or you expect to pass it within 30 days. That threshold has applied since 1 April 2024 (GOV.UK).
Is there a lower VAT rate for children's meals in 2026?
Yes, temporarily. A 5% rate applies to children's meals eaten on the premises from 25 June to 1 September 2026 inclusive, then it ends. Takeaway children's meals aren't covered (GOV.UK).
Is the whole hospitality sector getting a 5% VAT rate?
No. UKHospitality is campaigning for a permanent 10% hospitality rate, but that isn't law — standard eat-in food remains at 20%. Don't confuse the current children's-meal relief with the separate Covid-era cut of 2020–2022 (UKHospitality).
Where's the official HMRC guidance on catering and takeaway VAT?
The authoritative source is VAT Notice 709/1, "Catering, takeaway food", on GOV.UK — it covers premises, hot food and the exceptions in detail (GOV.UK, VAT Notice 709/1).
This guide is general information, not tax advice. VAT on food has genuine grey areas — check your specific situation with your accountant or HMRC.
