vat-on-food

---
name: vat-on-food
description: Turns your real menu, drinks list, counter cabinet and EPOS button export into a written VAT liability for every single line you sell: the statutory hook from VAT Act 1994 Schedule 8 Group 1 recorded against each item, a separate eat in and takeaway decision for each one, the five part hot food test worked through test by test, a till button map naming every button whose rate disagrees with the decision, an apportionment record for any single price covering more than one rate, an evidence register naming the document behind each decision and the date it was read, a borderline register written for your accountant to rule on, and a gaps list. Use when you are setting up or reviewing till buttons, opening a takeaway or delivery line, changing a menu, or you cannot say in writing why a given item is zero rated.
---

# Every menu line and every till button carrying a written VAT liability, with the statutory hook and the evidence behind it

You give this your printed menu, your drinks and counter lists, your delivery platform listings, your EPOS product and tax code export, a photograph or two of how the food is actually held and served, and your seating arrangement. You get back a liability decision for every line, built from VAT Act 1994 Schedule 8 Group 1 and worked through in the order the statute works: is it food, is it an excepted item, is it in the course of catering, is it hot at the moment it is handed over, and does it meet any of the five hot food tests. You also get the till button map, which is usually where the money is, because the button is what actually charges the customer. It will not rule on a genuinely borderline product. Those go in a separate register with the facts, the statutory hook and the evidence attached, for your accountant to decide, and it will not tell you what proportion of a venue like yours is normally zero rated, because no such published figure exists for one venue.

## What it does

1. **Enumerate every line you actually sell, from the documents that actually sell it.** Pull the printed menu, the specials board photographed on a trading day, the drinks list, the bar snack shelf, the counter cabinet, the retail items beside the till, and the EPOS product export with its tax codes. Add the delivery platform menus separately, because a Deliveroo or Just Eat listing is a published menu in its own right and routinely carries lines the printed menu does not. For each line record the name exactly as printed, the section it sits in, the channel it is sold through and the price. Do this before any rate is discussed, because a liability review that begins in the EPOS rate field simply inherits whatever the last supplier configured and then proves it to itself. The count you end with is the population every later step must cover, and a line that appears in one document but not another is already a finding.

2. **Settle the food question first, because every step after it assumes the answer.** Schedule 8 Group 1 zero rates general item 1, "Food of a kind used for human consumption". Notice 701/14 gives the working test at paragraph 2.3: a product is food of a kind used for human consumption if "the average person, knowing what it is and how it's used, would consider it to be food or drink" and "it's fit for human consumption". Note (1) to the Group settles the question people get wrong on the drinks list: "'Food' includes drink." This sits first because the excepted items in step 3 and the catering rules in step 4 only ever operate on something that is food to begin with, so the gift card, the branded t-shirt, the bag of charcoal and the bottle of house cleaner sold over the counter leave the process here and are handled as ordinary standard rated sales.

3. **Work the excepted items, then the items overriding the exceptions, in that order and never the reverse.** Group 1 zero rates the general items "except (a) a supply in the course of catering; and (b) a supply of anything comprised in any of the excepted items set out below, unless it is also comprised in any of the items overriding the exceptions set out below which relates to that excepted item". Excepted item 2 catches "Confectionery, not including cakes or biscuits other than biscuits wholly or partly covered with chocolate or some product similar in taste and appearance". Item 4 catches "Other beverages (including fruit juices and bottled waters) and syrups, concentrates, essences, powders, crystals or other products for the preparation of beverages". Item 5 catches "potato crisps, potato sticks, potato puffs, and similar products made from the potato, or from potato flour, or from potato starch, and savoury food products obtained by the swelling of cereals or cereal products; and salted or roasted nuts other than nuts in shell". Then the overriding items put tea, cocoa, coffee and milk back to zero. This is the step that dismantles the cold takeaway meal deal: the sandwich is zero rated, and the crisps and the soft drink beside it are excepted items, standard rated at any temperature, in any weather, wherever the customer eats them.

4. **Decide whether the supply is in the course of catering using Note (3) and Note (3A), not the till button.** Note (3) states that a supply in the course of catering includes "(a) any supply of it for consumption on the premises on which it is supplied; and (b) any supply of hot food for consumption off those premises". Note (3A) extends premises to "any area set aside for the consumption of food by that supplier's customers, whether or not the area may also be used by the customers of other suppliers", and Notice 709/1 section 3.2 repeats it for retailers. That is the sentence that catches the two tables on the pavement, the bench the venue put outside the door, and the shared seating in a food hall or market where the tables belong to nobody in particular. Notice 709/1 section 1.3 gives the three separate routes into catering, so a supply qualifies if it is within the ordinary meaning of catering, or is for on premises consumption, or is hot takeaway food. Record which of the three grounds you relied on, because the ground is what an officer will ask about, and "the button said eat in" is not a ground.

5. **Run the precondition, then the five hot food tests as alternatives, one line at a time.** Notice 709/1 section 4.3 states the precondition: "Under 'the precondition' only food or drink that's hot at the time it's provided to the customer is standard-rated. Something is hot if it's at a temperature above 'the ambient air temperature'." Only once that is satisfied do the tests matter, and the notice lists them as food that has "been heated for the purposes of enabling it to be consumed hot", "been heated to order", "been kept hot after being heated", been "provided to a customer in packaging that retains heat (whether or not the packaging was primarily designed for that purpose) or in any other packaging that is specifically designed for hot food", or been "advertised or marketed in a way that indicates that it's supplied hot". They are alternatives, not a checklist to be scored: one test met is enough, and the notice's own worked example makes the point, because when the retailer "decides to keep its pasties under heat lamps to slow the cooling process ... Test 3 is met as the pasties are being kept hot after they have been cooked and the sale of the pasties is standard-rated". Two details decide most real arguments. Test 4 "will mainly affect products that are sold in specialised packaging, such as foil lined bags and insulated containers including specially designed cardboard boxes" and "will not affect products that are sold in ordinary paper bags". Test 5 expressly excludes the marketing word most bakeries use, because "'Advertised or marketed in a way that indicates that it is supplied hot' does not include advertised or marketed as 'freshly baked'".

6. **Turn each decision into a till button map, and read the EPOS as evidence rather than as authority.** Every line that can be sold both ways needs two buttons carrying two liabilities, because eat in and takeaway are different supplies of the same food and the difference is worth the whole 20 per cent. Export the current tax code against each button with the date you exported it, put it beside the decision from steps 2 to 5, and mark every disagreement. This step comes after the decisions and not before them for the reason given in step 1: a map drawn first becomes a map of the previous supplier's assumptions, and the mismatches are exactly what you are looking for. A button with no matching menu line, and a menu line with no button, both belong on the mismatch list as well.

7. **Apportion any single price that covers more than one liability, and write down the method you used.** VAT Notice 700/22 paragraph 3.3.2 carries a rule with the force of law: "Where you need to apportion the output tax due on a mixed-rate supply with a single inclusive price, you do not need to record these supplies separately. You can record the total value and the total output tax due." The notice's own example is the exact problem a cafe has: "A business sells a meal deal for GBP 3. It contains a zero-rated sandwich, a standard-rated pack of crisps and a standard-rated drink. The apportionment shows that the VAT due is 30p." The notice also sets out the practical fallback, that where software cannot hold a mixed rate you record the sale as a standard rated element and a zero rated element, or record it at one rate and correct it by an adjustment at period end. Record which method produced the split, cost based or selling price based, and record where each input figure came from. An apportionment with no stated method is a guess wearing a decimal point.

8. **Build the evidence register, and re-read every rate and threshold on the day you use it.** The GOV.UK guide Charge, reclaim and record VAT says plainly that "There are 3 rates of VAT (standard, reduced and zero-rated). VAT rates can change. You must apply any changes to the rates immediately, from the date they change", and that you "usually charge standard rate of VAT (currently 20%) on most goods and services". So the rate is never taken from a prompt, a template, a trade article or last year's spreadsheet: open the page, read the number, and record the number, the tax year it belongs to, which is 2026 to 2027 at the time this is written, and the date you read it. Against each line, register the documents that support the decision: the packaging specification for test 4, a dated photograph of the heat lamp or hot cabinet for test 3, the marketing wording as published for test 5, the seating plan or lease extract for Note (3A), and the supplier specification for a product whose composition is in question.

9. **Hand the finished decisions to Codex and let it build the registers.** Claude hands over the enumerated line list with, for every line, the food answer, the excepted item number and any overriding item number, the catering ground, the precondition answer, each of the five tests marked met or not met, the channel, the price, the apportionment method where one applies, the evidence documents with their dates, and the raw EPOS export. Codex makes no judgement at all: it tabulates what it is given, counts it, and writes anything unanswered into the gaps list. Run it from the folder holding the exports:

   ```
   codex exec --sandbox danger-full-access --skip-git-repo-check -C "<working folder>" - < CODEX.md
   ```

   What comes back is the per line liability register, the till button map with every mismatch marked, the eat in and takeaway apportionment record, the evidence register, the borderline register and gaps.md, plus the counts you check in the next section.

10. **Write the borderline register for the adviser, and watch the registration threshold if you are not registered yet.** A line is borderline when the facts are settled and the law still reasonably reads two ways, and the honest output is not a ruling but a file: the line, the facts, the statutory hook, both readings, the evidence held, and the single question for the accountant. That is the deliberate limit of this skill. Separately, if the business is not registered, the Register for VAT guide states you must register if "your total taxable turnover for the last 12 months goes over GBP 90,000 (the VAT threshold)" or you "expect your taxable turnover to go over GBP 90,000 in the next 30 days", that taxable turnover "also includes: zero-rated goods", and that "You have to register within 30 days of the end of the month when you went over the threshold." A sandwich shop whose sales are mostly zero rated still counts every one of them toward that figure, which is the single most expensive misunderstanding in this whole area. Read the threshold off the page on the day you use it and record the date, because it is a Budget figure and it moves.

## Then it checks

1. Every line enumerated in step 1 appears in the liability register with a liability recorded, and the register row count equals the line count from step 1 with no unexplained difference.
2. Every line marked standard rated on the ground of hot food records the precondition as met and names at least one of the five tests as met, and no line is marked standard rated on hot food grounds with zero tests met.
3. Every line marked zero rated records the general item number it falls under and records that it was checked against the excepted items, and any line inside an excepted item also names the overriding item that brings it back.
4. Every line sold both ways has two rows, one for eat in and one for takeaway, and each row names the catering ground it relied on.
5. Every till button in the EPOS export is matched to a line or is listed as unmatched, and every mismatch between the button's current tax code and the decided liability is named with the button label and the export date.
6. Every single price covering more than one liability has an apportionment row naming the method, the component values and the output tax, and no apportionment row has an empty method field.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is.
- Never state what proportion of an independent venue's sales are typically zero rated, nor a typical VAT recovery rate, an effective tax rate or a typical liability as a percentage of turnover. No published figure exists for a single independent UK hospitality business, and the numbers that circulate come from software vendors and trade surveys with unpublished samples. An owner who believes one is worse off twice over: a correct rate split that differs from the borrowed figure gets read as a mistake and gets "corrected" into an error, and a genuinely wrong split that happens to match it gets left alone for years.
- Never rule on a genuinely borderline product. Record the facts, the statutory hook, both readings and the evidence, and send it to the accountant as a question. A confident wrong answer on a high volume line compounds every day it stays on the till.
- Never take the liability from the EPOS, from the previous owner's menu, from a supplier's rate field or from what the shop next door charges. The EPOS is evidence of what is currently being charged, which is the thing under examination.
- Never take a VAT rate, the registration threshold or any other figure that moves from this document or any other prompt. Open the source page on the day, read the figure, and record the figure, the tax year it belongs to and the date you read it. A number that lives only inside a prompt is wrong the morning after a Budget and gives no warning.
- Never decide a line on temperature alone. The precondition and the five tests are two separate questions, and a cold excepted item such as crisps, a soft drink or confectionery is standard rated whether it is hot, cold or frozen.
- This output is a working document prepared for the owner's own accountant or tax adviser to check before any till button is changed or any return is filed. It applies published law and published HMRC guidance to the facts the owner supplied. It is not tax advice, it is not a clearance, and it is not a ruling that any liability shown is correct.

## Built from
- VAT Act 1994, Schedule 8 (Zero-rating), Group 1 Food, including the general items, the excepted items, the items overriding the exceptions and Notes (1), (3), (3A), (3B), (3C) and (3D), https://www.legislation.gov.uk/ukpga/1994/23/schedule/8, the page states it is "up to date with all changes known to be in force on or before 21 September 2026", read 23 September 2026: the general item in step 2, the excepted and overriding items in step 3, Notes (3) and (3A) in step 4, and Notes (3B) to (3D) in step 5.
- HM Revenue and Customs, "Catering, takeaway food (VAT Notice 709/1)", https://www.gov.uk/guidance/catering-takeaway-food-and-vat-notice-7091, published 7 October 2013, last updated 8 June 2026, read 23 September 2026: section 1.3 and section 3.2 in step 4, and sections 4.2, 4.3 and 4.4 with the five tests, the heat lamp example and the freshly baked exclusion in step 5.
- HM Revenue and Customs, "Food products (VAT Notice 701/14)", https://www.gov.uk/guidance/food-products-and-vat-notice-70114, published 10 February 2014, last updated 8 June 2026, read 23 September 2026: paragraph 2.3, the average person test for food of a kind used for human consumption, in step 2, and paragraph 3.4.3 on the freshly baked borderline, which is why step 5 exists as a separate step.
- HM Revenue and Customs, "VAT Notice 700/22: Making Tax Digital for VAT", https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat, the page states "Updated 1 April 2022", read 23 September 2026: paragraph 3.3.2, including the force of law rule on mixed rate supplies with a single inclusive price and the meal deal worked example, in step 7.
- HM Revenue and Customs and GOV.UK, "Charge, reclaim and record VAT", the Charging VAT part, https://www.gov.uk/charge-reclaim-record-vat, the page itself prints no date and the GOV.UK content API records it as first published 16 May 2022 and updated 30 October 2024, read 23 September 2026: the three rates, the warning that rates change and must be applied from the date they change, and the current standard rate, all in step 8.
- HM Revenue and Customs and GOV.UK, "Register for VAT", the When to register for VAT part, https://www.gov.uk/register-for-vat, the page itself prints no date and the GOV.UK content API records it as first published 16 May 2022 and updated 10 October 2024, read 23 September 2026: the GBP 90,000 threshold, the inclusion of zero rated goods in taxable turnover and the 30 day notification rule, all in step 10.

# vat-on-food

## You are given
The enumerated menu line list for one UK hospitality business, built from the printed menu, the specials board, the drinks and counter lists, the delivery platform menus and the EPOS product and tax code export, with the source document named against every line. For every line, the decisions Claude has already worked through the statute and the notices to reach: the food of a kind used for human consumption answer, the general item number, the excepted item number where one applies and the overriding item number where one brings it back to zero, the catering ground relied on (ordinary meaning of catering, on premises consumption, or hot takeaway food, or a statement that the line is not in the course of catering), the precondition answer, and each of the five hot food tests marked met or not met. The channel each line is sold through, exactly one of eat in, takeaway, delivery platform or retail counter, and the price. Every line sold under more than one channel supplied as a separate row per channel. Any single price covering more than one liability, with the apportionment method the owner chose, cost based or selling price based, and the component values behind it. The evidence documents behind each decision, each with a file name and a date. The raw EPOS export of every till button with its current tax code and the date the export was taken. Every genuinely borderline line marked as such by Claude, with both readings and the question for the accountant already drafted. All judgement calls, including every liability decision, the catering ground, the apportionment method and which lines are borderline, have already been made and are supplied to you.

## Produce
Write into a `./vat-on-food-output/` folder:

1. `liability-register.csv` with these columns in this order: `line_ref`, `line_name_verbatim`, `source_document`, `channel`, `price_gbp`, `food_of_a_kind_answer`, `general_item_number`, `excepted_item_number`, `overriding_item_number`, `catering_ground`, `precondition_met`, `hot_food_test_1_met`, `hot_food_test_2_met`, `hot_food_test_3_met`, `hot_food_test_4_met`, `hot_food_test_5_met`, `liability`, `evidence_ref`. `line_ref` is L001 upward, one row per line per channel it is sold through. `channel` is exactly one of `eat in`, `takeaway`, `delivery platform`, `retail counter`. `food_of_a_kind_answer` is `yes` or `no`. `catering_ground` is exactly one of `ordinary meaning of catering`, `on premises consumption`, `hot takeaway food`, `not in the course of catering`. `precondition_met` and every `hot_food_test_n_met` cell is exactly one of `met`, `not met`, `not applicable`. `liability` is exactly one of `zero rated`, `standard rated`.
2. `till-button-map.csv` with columns: `button_label_verbatim`, `epos_export_date`, `epos_tax_code`, `matched_line_ref`, `decided_liability`, `mismatch`. `mismatch` is `yes` or `no`. Every button with no matching line has an empty `matched_line_ref` and `mismatch` set to `yes`. Every line with no matching button gets its own row with an empty `button_label_verbatim` and `mismatch` set to `yes`.
3. `apportionment-record.csv` with columns: `bundle_ref`, `bundle_name_verbatim`, `channel`, `total_price_gbp`, `component_line_ref`, `component_description_verbatim`, `component_liability`, `apportionment_method`, `component_value_gbp`, `component_output_tax_gbp`, `method_source_note`. `bundle_ref` is B001 upward, one row per component of the bundle. `apportionment_method` is exactly one of `cost based`, `selling price based`.
4. `evidence-register.csv` with columns: `evidence_ref`, `supports_line_ref`, `supports_decision`, `evidence_type`, `evidence_file_name`, `evidence_date`, `notes`. `evidence_type` is exactly one of `packaging specification`, `dated photograph of hot cabinet or heat lamp`, `marketing wording as published`, `seating plan or lease extract`, `supplier specification`, `other document supplied`.
5. `borderline-register.csv` with columns: `line_ref`, `line_name_verbatim`, `facts_summary`, `statutory_hook`, `reading_one`, `reading_two`, `evidence_held`, `question_for_accountant`. One row per line Claude has marked borderline. No liability is recorded on these rows in `liability-register.csv`; instead that row's `liability` cell reads `borderline, see borderline-register.csv`.
6. `gaps.md` a numbered list of: every line with no liability recorded; every line marked standard rated on hot food grounds with zero of the five tests marked met; every line inside an excepted item with no overriding item recorded; every line sold under more than one channel with only one row present; every till button and every line appearing on the mismatch list; every apportionment row with an empty `apportionment_method` or `method_source_note`; and any rate, threshold or figure supplied without a date attached to it.

## Rules
- Codex tabulates, counts and cross checks only. It never decides a liability, never rules on a borderline line, never chooses a catering ground, never sets an apportionment method and never estimates a VAT rate or the registration threshold. Every one of those was decided before the file reached Codex.
- A line with no supplied liability decision gets an empty `liability` cell and a line in `gaps.md`. It is never inferred from the line name, the channel or the EPOS tax code.
- Never mark a hot food test `met` unless the supplied decision says so. A pasty under a heat lamp and a pasty on an open shelf are different rows even if the name printed on the menu is identical.
- Never write a December uplift, an average spend per head, a typical VAT recovery rate or any industry benchmark into any file. No such figure exists for a single independent UK hospitality business and none is to be recorded.
- Never carry a liability, a button label or a tax code forward from a previous export. Only the export named in `epos_export_date` is used, and an older export supplied for comparison is recorded in a separate column and never used in a calculation.
- Use British English, GBP written as `GBP` or the pound sign, and DD Month YYYY dates. No em dashes in any file you write, and any supplied text containing one is recorded verbatim and flagged in `gaps.md`.
- Every quoted line name, button label and menu description is copied exactly, including its punctuation and capitalisation.
- Every file ends with this line: this is a working document prepared for the owner's own accountant or tax adviser to check before any till button is changed or any return is filed. It applies supplied decisions to the supplied facts and is not a ruling that any liability shown is correct.

## Return
The absolute path of every file written, the row count of each CSV, the count of lines carrying each liability value, the count of lines marked standard rated on hot food grounds with the count of tests met for each, the count of till button mismatches with the button labels involved, the count of apportionment rows and whether every one names a method, the count of lines in the borderline register, the count of evidence register rows with no matching `supports_line_ref` in any other file, and the `gaps.md` item count.