In the latest case at the First Tier Tribunal, Morrisons argued on two grounds that its whole cool-down rotisserie chickens should be subject to 0% VAT and not 20% VAT. One of these grounds was that the chickens should benefit from 0% VAT as ‘food of a kind used for human consumption’.

‘Hot food’ is defined in the VAT legislation as any food which is hot at the time it is provided to the customer. The ‘pasty tax’ from the 2012 Budget changed the playing field making any food sold above ambient air temperature subject to 20% VAT. Pre-2012, the rules were a lot more lenient and meant some freshly baked items, such as pasties and rotisserie chickens, could benefit from 0% VAT.

The carve-out for hot food in the legislation is extensive with many accompanying notes and these were considered as part of Morrisons’ appeal. But whilst some points went in Morrisons’ favour at the tribunal, the decision was ultimately made in HMRC’s favour leaving Morrisons facing a £17m VAT debt relating to the VAT periods from January 2017 to July 2020.

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