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Which VAT rate applies (UK hospitality)

A plain-English map of common UK VAT rates for food and drink — and how to set them in Tillable.

Tillable's VAT articles explain how to set up and assign a rate. This one is about which rate to assign — the question that comes up the moment you create a cold takeaway item or a hot dish and aren't sure what to charge.

Heads up

We are not your accountant, and this is not tax advice. VAT on food and drink has real edge cases and the rules change. The authority is HMRC — see VAT Notice 709/1: catering, takeaway food (gov.uk). If you're unsure, check with HMRC or your accountant before you rely on a rate.

Common UK categories, in plain terms

These are the broad strokes most hospitality businesses see. They are a starting point, not a ruling — the notice above governs the detail.

  • Hot food — typically standard-rated (20%), whether eaten in or taken away. "Hot" broadly means food sold hot to be eaten hot.
  • Eat-in food and drink — typically standard-rated (20%). Anything consumed on your premises is generally standard-rated regardless of what it is.
  • Cold takeaway food — often zero-rated (charged at 0%). Cold food taken away to eat elsewhere is the common zero-rated case — but there are exceptions (for example confectionery, crisps and some drinks are standard-rated even cold and to take away).
  • Alcohol — standard-rated (20%), however it's served.
  • Soft drinks, bottled water, confectionery, crisps — generally standard-rated, even cold and taken away.

The recurring distinction is eat-in versus takeaway and hot versus cold: the same sandwich can be 20% eaten in and 0% taken away cold. How you handle that split in Tillable is below.

Turning a rate decision into Tillable

Once you've decided the rate for an item:

  1. 1

    Create the rate (once)

    Under Items → VAT, add the rate you need — e.g. "Standard 20%". You only do this once; then it's available on every product. See VAT rates.

  2. 2

    Assign it on the product

    On the product editor, pick that rate in the VAT section. For a zero-rated item, choose No VAT — that's how you charge 0%. See Create a product.

A hot add-on on a cold item

If an optional add-on changes the item's tax category — the classic case being a hot topping on an otherwise cold (zero-rated) item — you can set that one option to its own VAT rate rather than letting it inherit the product's. This is done on the modifier option's VAT field (its default is "Inherit from item"). See Modifiers and options.

One rate per item, across every channel

A product's VAT rate is global — the same rate applies on the till, on QR ordering and on click-and-collect. There is no per-channel rate. If you genuinely need different rates by channel (for instance an eat-in rate on the till versus a takeaway rate on collect), the way to do that today is two separate products, each with its own rate, each available on the right channel. See VAT rates.

VAT in your online shop

Your shop always shows customers a price that includes VAT, which is what UK price marking requires for consumers.

When you set an Online shop price you can type it either way — pick Excludes VAT and we add the VAT for you. That choice only affects how you type the number in; what is stored and what the customer is shown is always the VAT-inclusive figure. The item's VAT rate is the same one used everywhere else, so nothing about your returns changes.

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