VAT Food Nuance! (Feb 2026)

In another food VAT case, HMRC challenged Slice of Pie Ltd (SPL) on the liability of hot meals delivered to nurseries - and whether they should be zero-rated for VAT as food, or standard rated as “catering.” The answer has big implications for similar businesses.

SPL cooked and delivered hot lunches and teas to nurseries, both private and state-run. The food was ordered in advance from a set menu, cooked fresh each day, and delivered hot in insulated containers. Once the food arrived, nursery staff would check temperatures, portion out meals, and handle any special dietary needs. The food was always meant to be eaten on the nursery premises, and invoices were issued per meal, not per food item.

The VAT rules say most food is zero-rated, but there’s an exception for “catering” - which includes hot food supplied for consumption on the premises. SPL argued that they weren’t providing catering, since they didn’t supply staff, cutlery, or seating, and nursery staff did some preparation. But HMRC disagreed, saying this was classic catering: hot, ready-to-eat meals delivered for immediate consumption.

The Tribunal sided with HMRC. They said the key factors were that the food was hot, ready to eat, delivered in a way that looked like commercial catering, and meant to be eaten on site. The fact that nursery staff did some minor preparation didn’t change the nature of the supply. The Tribunal also clarified that it didn’t matter that the nursery, not the children, was the customer for VAT purposes - the important thing was that the food was supplied for consumption on the premises.

In short, the case confirms that if you’re supplying hot, ready-to-eat meals to be eaten on the customer’s premises, you’re likely providing “catering” and must charge standard rate VAT, even if the end consumer isn’t your direct customer and even if some prep is done by staff at the destination.

This decision is a reminder to review your VAT treatment if you’re in a similar line of business.