What counts as “premises” for VAT?
Q. We run a café and sandwich bar in a shopping centre. Outside our café we have about ten chairs and four tables where customers can enjoy their food and drink. About 20 yards away there is another seating area, described as a “food court”, where customers from six different catering outlets can sit. This area is cleaned by the shopping centre and not any of the outlets. Is cold food consumed at both outlets zero-rated as takeaway sales?
A. There is no zero-rating for food or drink consumed on the premises of a catering establishment, only cold takeaway food in most cases. The premises outside your shop are directly linked to your business, so unfortunately all food and drink consumed here will be standard-rated. However, HMRC’s guidance also seems to capture the second site, depending on the exact layout of the tables and chairs, i.e. if they are specifically designed to accommodate customers who want to eat and drink. The wording in HMRC’s guidance confirms that the definition of “premises” includes “tables and chairs in food courts shared with other food retailers” . However, the guidance also confirms the exclusion of benches in shopping centres designed as general seating for customers to rest or wait.
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