VAT on Food UK: What’s Zero-Rated and What’s 20% (2026/27)

The rules on VAT on food UK shoppers meet every week look odd at first glance. A loaf of bread has no VAT in its price, yet the crisps on the next shelf do. A plain digestive is VAT-free, but dip it in chocolate and 20% gets added. It all follows a list in the law.

This guide to VAT on food UK rules is for shoppers who want to understand their receipt and for small food businesses that need to charge the right rate. It is based on HMRC’s VAT Notice 701/14, last updated on 8 June 2026.

VAT on Food UK: How the Rules Work

The starting point for value added tax on food is Schedule 8, Group 1 of the Value Added Tax Act 1994. It sets a 0% rate for food of a kind used for human consumption. It then lists “excepted items” that are taxed at the standard rate, followed by a shorter list of products that go back to 0% even though they would otherwise be excepted. Food supplied as catering sits outside this zero-rating altogether.

So deciding the VAT on any product means asking three questions in order. Is it food? Is it on the excepted list? If so, is it rescued by one of the overriding items?

Is there VAT on food in the UK?

For most groceries the answer is no VAT is added, but that doesn’t mean food sits outside the VAT system. Zero-rated food is still a taxable supply; the rate just happens to be 0%. The table below shows why that matters.

Zero-rated, exempt and standard-rated: what’s the difference?

The practical difference: a business making zero-rated sales can usually reclaim the VAT it pays on its own costs, while a business making only exempt sales generally can’t.

Which Food Is Zero-Rated? Items That Are Zero Rated for VAT

If something is sold for people to eat and isn’t on the excepted list, it is zero-rated. In practice that covers most of a weekly shop, so for VAT on supermarket food in the UK the usual answer is 0%. The main groups are:

• Fresh, chilled and frozen basics: meat, poultry, fish, eggs, fruit and vegetables.
• Bakery: bread, rolls, cakes (including sponges and flapjacks) and biscuits without a chocolate coating.
• Store cupboard: flour, rice, pasta, breakfast cereals, sugar, cooking oil, herbs and spices.
• Dairy: milk, cheese, butter and yoghurt, plus plain soya and rice milk.
• Hot drink ingredients: tea bags, loose and herbal tea, coffee beans, ground and instant coffee, and cocoa.

Two quick answers people often search for: milk is zero-rated, so no VAT is added to its shop price, and there is no VAT on tea bags bought to make tea at home. Both change once a café pours them into a cup, because that becomes catering.

Cold ready meals and pre-packed sandwiches are zero-rated too when you take them away. Heat them in the shop, or sit down to eat them there, and 20% applies. If you sell food and aren’t sure which side of the line your products fall on, our VAT specialist accountants can check your price list.

Food With VAT: The Items Charged at 20% in the UK

The excepted items are where food picks up VAT. Notice 701/14 groups them into six categories, all taxed at 20% wherever you buy them:

• Confectionery: sweets, chocolate bars, cereal bars and sweet items normally eaten with the fingers. Nuts or fruit coated in chocolate, yoghurt or sugar also count.
• Savoury snacks: potato crisps, similar snacks made from potato, and shelled nuts that have been roasted or salted.
• Ice cream and frozen desserts: ice cream, ice lollies, sorbets and frozen yoghurt made to be eaten frozen.
• Drinks: fizzy drinks, squash and cordials, fruit juice, smoothies and bottled water sold as a drink.
• Alcohol: beer, cider, wine and spirits, and alcohol-free beer and wine too.
• Home brewing: kits, hops, malt extract and similar products for making beer or wine.

Exceptions to the exceptions

Some products would fall into those categories but are pulled back to 0% by the law’s overriding list. The ones you’re most likely to meet are milk and milk drinks, tea, coffee and cocoa, cakes, biscuits that aren’t covered in chocolate, frozen yoghurt designed to be thawed before eating, and plain soya or rice milk. That is why, under VAT on food UK rules, a cold milkshake to take away has no VAT, while a can of cola costs 20% more.

VAT on Food UK: Item-by-Item Table

Use this table to check VAT on food UK shops sell for eating at home. Rates apply to the item itself; eating in a café or buying it hot changes things, as explained further down.

Is coffee vatable? Coffee bought to make at home is zero-rated, but a coffee from a café is 20% because it’s a hot drink. On alcohol, the VAT is added on top of alcohol duty, which is a separate tax. Pet food isn’t covered by Notice 701/14 at all; it has its own rules in VAT Notice 701/15.

Borderline Cases: Jaffa Cakes, Pringles and Poppadoms

The law names categories, not brands, so some products end up in front of a tribunal. Three disputes explain most of the grey areas in VAT on food UK manufacturers still argue about.

Cake or biscuit? The Jaffa Cakes case

A cake stays zero-rated even with chocolate on it, while a biscuit partly covered in chocolate is taxed at 20%. In the Jaffa Cakes appeal by United Biscuits (reference LON/91/0160), the tribunal weighed up the batter, the texture, the size and how the product goes stale. A stale cake turns hard; a stale biscuit turns soft. Jaffa Cakes go hard and have a sponge base, so they were held to be cakes and remain zero-rated. HMRC’s VAT Food manual (VFOOD6260) still lists these factors.

The same thinking explains a smaller oddity in Notice 701/14: a gingerbread man is zero-rated, but if it’s decorated with chocolate beyond a couple of dots for eyes, it becomes standard-rated.

Pringles: “similar to” potato crisps

Procter & Gamble argued that Pringles weren’t potato crisps because only part of the dough is potato. The Court of Appeal disagreed in HMRC v Procter & Gamble UK [2009] EWCA Civ 407. The law covers products made from potato flour and similar to crisps, and Pringles fitted that description in everyday terms, so they carry VAT at 20%.

Walkers Sensations poppadoms

Walkers challenged HMRC’s view that its Sensations poppadoms were a crisp-like snack. The Upper Tribunal dismissed the appeal in Walkers Snack Foods Ltd v HMRC [2025] UKUT 155 (TCC). Because they contain potato and are similar to crisps, they stay standard-rated.

Supermarket Food vs Hot, Takeaway and Eaten-In Food

Two rules can override the VAT on food UK rates above. Under VAT Notice 709/1, food eaten on the seller’s premises counts as catering and is 20%. Takeaway food is also 20% when it’s above the surrounding air temperature and meets one of HMRC’s five tests, such as being heated so it can be eaten hot or kept warm after cooking. For the detail, see the MTDFix guide to VAT on takeaway food and Major Accountancy’s guide on VAT on restaurant food.

Worked Example: How Much VAT Is in Your Shopping Basket?

Do you pay VAT on food at the supermarket? Only on some of it, and shop prices already include it. To find the VAT inside a price charged at 20%, divide it by 6. Here’s an illustrative weekly top-up shop with example prices:

Half the items carry VAT, but only £1.53 of the £16.33 bill is tax, about 9%. Swap the chocolate digestives for plain ones and the water for squash you dilute at home? The digestives drop to 0%, but squash is still 20%. That’s the kind of quirk that makes VAT on food UK receipts worth a second look.

VAT on Food UK for Small Food Businesses

If you run a bakery, farm shop, market stall or online food brand, VAT on food UK rules affect more than your prices. Registration works differently from what many owners expect.

• Zero-rated sales count towards the threshold. According to GOV.UK, you must register once taxable turnover for the last 12 months goes over £90,000, and zero-rated goods are included. You must also register if you expect to pass £90,000 in the next 30 days alone.
• You can ask not to register. If most of what you sell is zero-rated, you can ask HMRC for permission not to register, even above the threshold.
• Registering can pay you back. A business selling mainly zero-rated food still pays 20% VAT on equipment, packaging and services. Once registered, it can usually reclaim that VAT, so its returns often show a repayment from HMRC.
• Making Tax Digital applies. Every VAT-registered business must keep digital records and file returns through compatible software. Our free MTD check shows whether your set-up is ready.

The commonest mistake we see is a till set to one rate for everything. A farm shop selling bread, crisps and juice needs at least two VAT codes. If you’d rather hand your returns over, see how much accountants charge for VAT returns.

VAT on Food UK: FAQs

Is there VAT on food in the UK?

Under VAT on food UK rules, most food is zero-rated, so no VAT is added. Confectionery, crisps and savoury snacks, ice cream, soft drinks, bottled water and alcohol are charged at 20%, as is food eaten in or sold hot.

Do you pay VAT on supermarket food?

Only on some items. Bread, milk, meat, fruit and vegetables have no VAT, while snacks, sweets and most ready-to-drink drinks other than milk include 20% in the shelf price.

Is there VAT on milk?

No. Milk and milk drinks are zero-rated, including a cold milkshake to take away. A hot milky coffee bought in a café is standard-rated because it’s a hot drink.

Is there VAT on bottled water?

Yes. Bottled water sold as a drink is standard-rated at 20%, the same as fizzy drinks, squash and fruit juice.

Is there VAT on chocolate?

Yes, on chocolate bars, sweets and biscuits covered in chocolate. Chocolate cakes and chocolate chip biscuits are zero-rated, because cakes and uncoated biscuits are overriding items.

Is there VAT on tea and coffee?

Not when you buy tea bags, coffee beans, ground coffee or instant coffee to make at home. Hot tea or coffee bought ready to drink is standard-rated.

Is there VAT on crisps?

Yes. Potato crisps and similar potato-based snacks are standard-rated. The courts confirmed this for Pringles in 2009 and for Walkers Sensations poppadoms in 2025.

Is there VAT on alcohol?

Yes. Beer, cider, wine and spirits are standard-rated, and so are alcohol-free beer and wine. VAT is charged on top of the price including alcohol duty.