The First-tier Tribunal found that supplies of hot food to elderly and house bound residents are standard rated supplies of catering.
The taxpayer cooked and delivered hot and chilled meals on wheels to the elderly and housebound. The taxpayer considered that these were zero rated. Following an inspection, HMRC assessed for output tax on the hot meals. The dispute is prior to the 2012 hot food changes but nothing turns on this – there is no dispute as to the fact that the food is hot and the changes to the definition of premises are irrelevant. The First-tier Tribunal (FTT) dismissed the taxpayer’s appeal.
Supplies in the course of catering are excepted from zero rating at the very top of Group 1, Schedule 8. These are defined in Note 3 as follows:
(3) A supply of anything in the course of catering includes:
(a) Any supply of it for consumption on the premises on which it is supplied; and
(b) Any supply of hot food for consumption off those premises;
There were three main arguments:
With no argument as to whether the meals were hot food, the taxpayer argued that the place where the meals were prepared were not premises for the purpose of Note 3(b). The taxpayer supported this on the basis that the list of premises (e.g. take-away, café or restaurant) in Notice 709/1 did not cover the type operated by the taxpayer. The FTT agreed with HMRC that the list is not exhaustive and cannot be relied upon. The meals fell under Note 3(b) and were therefore standard rated.
Despite having lost on the above point, the FTT went onto consider the taxpayer’s further argument. The taxpayer argued that, because the food is delivered in different containers, this amounted to food that requires significant further preparation, which was an example of something considered not to constitute a supply in the course of catering in Notice 701/9. The FTT noted again, that the Notice does not have the force of law and cannot be relied upon. The FTT also pointed out that the supplies were closer to the example of delivery of cooked, ready-to-eat food or meals without crockery or cutlery, an example which was considered a supply in the course of catering.
The taxpayer added a late argument that the supplies were exempt under the welfare exemption. The FTT pointed out this exemption is limited to supplies by certain bodies which the taxpayer was not. Whilst noting the services may be similar to those of a local authority, they cannot be exempt as they are not supplied by an eligible body.
The taxpayer’s appeal was dismissed.
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