Overview

The ECJ has recently published its judgment in the joint cases of Manfred Bog, CinemaxX, Lohneyer and Fleifscherei regarding the sale of hot food.

The cases concerned whether taxpayers in Germany were able to place a reduced rate of VAT on the food they sold on the basis that they were not actually providing restaurant or catering services but were merely providing foodstuffs.

Despite HMRC’s attempts to downplay the consequences of these decisions, they are significant for businesses involved in the sale of hot takeaway food or mobile food services:

• Many businesses that have charged VAT in the past should not have done so;

• As a result there are likely to be numerous claims to recover overpaid VAT.

The UK zero rates all food other than confectionary and beverages. Catering services and hot food are standard rated. In the past the UK courts have grappled with the VAT liability attaching to hot food from Cornish pasties to fish and chips. These decisions must now be in doubt following the Bog decision.

Nabarro discusses the implications.

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