VAT Food Nuance! (Jan 2026)

The 2025 Morrisons VAT case on rotisserie chickens is a fascinating example of how complex UK VAT law can be, especially when it comes to food. The dispute centred on whether Morrisons’ “cool-down rotisserie chickens” (CDRCs) should be zero-rated as food for human consumption, or standard-rated as “hot food” following the “Pasty Tax” reforms.

Morrisons argued that their chickens, sold after being cooked and left to cool, were not “hot food” and should be zero-rated. They said most customers bought them to eat later, not immediately, and that the chickens were not marketed as hot. However, HMRC disagreed, assessing over £17 million in VAT, and the case went to the First-tier Tribunal.

The law says food is zero-rated unless it’s “hot food” or supplied “in the course of catering.” The definition of “hot food” is detailed: it must be hot at the time of sale and meet at least one of several criteria, such as being kept hot after cooking, provided in heat-retentive packaging, or advertised as hot.

The Tribunal looked closely at how Morrisons sold their chickens. While the chickens weren’t specifically marketed as hot, they were placed in special paper bags right after cooking, which slowed cooling and kept them hot for longer. The Tribunal found that this packaging was more than just a simple bag – it was designed to retain heat and prevent leaks. As a result, the chickens met the legal tests for “hot food” because they were kept hot after cooking and provided in heat-retentive packaging.

Morrisons also argued that HMRC had previously accepted their zero-rating, creating a “legitimate expectation” that VAT wouldn’t be charged. But the Tribunal found no clear, unambiguous ruling from HMRC, and Morrisons hadn’t fully disclosed all relevant facts.

In the end, the Tribunal dismissed Morrisons’ appeal. The case clarifies that even if food isn’t marketed as hot, if it’s kept hot and packaged to retain heat, it can be standard rated for VAT. It’s a reminder for businesses to be meticulous about VAT compliance and to seek clear guidance from HMRC when in doubt.

If this impacts your business and you would like to discuss this, VITA would be delighted to hear from you.