Quick answer: In the UK, eat-in food and drink is always standard-rated at 20% VAT. Hot takeaway food is also 20%. But most cold takeaway food is zero-rated (0%) when eaten off the premises. So the exact same sandwich can be 20% VAT eaten in, or 0% VAT taken away cold — which is why your EPOS needs to apply the right rate per order.
UK VAT on food trips up a lot of restaurant and cafe owners, because the rate depends less on what you sell and more on how it is sold. Get it wrong and your VAT return is off. Here is the plain-English version.
What is the VAT rate for UK restaurants?
The standard UK VAT rate is 20%. Everything you serve to eat or drink on your premises is standard-rated at 20% — no exceptions for hot vs cold once it is eat-in. The nuance only appears with takeaway.
Eat-in vs takeaway: the rule that decides the rate
- Eat-in (any food or drink): 20% VAT, always.
- Hot takeaway food: 20% VAT (it is heated to be eaten hot).
- Cold takeaway food: usually 0% (zero-rated) when eaten off the premises — for example a cold sandwich, salad or bottled drink to go.
- Some items are always standard-rated even cold and to-go — e.g. crisps, confectionery, ice cream, and most soft/alcoholic drinks.
Hot vs cold: worked examples
| Item | Eat-in | Takeaway |
|---|---|---|
| Hot coffee | 20% | 20% (hot) |
| Cold sandwich | 20% | 0% |
| Hot pizza / fish & chips | 20% | 20% (hot) |
| Bottled water | 20% | 20% (always standard) |
| Cold salad | 20% | 0% |
Want to check a figure? Our free UK VAT calculator adds or removes 20% (or 5%/0%) instantly.
How should you handle this on your EPOS?
Trying to remember all this at the till is a recipe for VAT errors. The clean fix is an EPOS that stores the correct VAT rate per item and per order type, so a cold sandwich rings up at 20% for eat-in and 0% for takeaway automatically — and exports the totals for your Making Tax Digital return. That is exactly how DineOpen’s UK EPOS handles it, with Xero export built in.
Frequently asked questions
Do you charge VAT on takeaway food in the UK? Hot takeaway food is standard-rated at 20%. Most cold takeaway food is zero-rated (0%) when eaten off the premises, though items like crisps, confectionery, ice cream and drinks are always standard-rated.
Is eat-in food always 20% VAT? Yes. Any food or drink consumed on your premises is standard-rated at 20%, regardless of whether it is hot or cold.
What is the VAT on a cold sandwich? Eaten in, it is 20%. Taken away cold to eat off the premises, it is usually zero-rated at 0%.