{"id":96261,"date":"2019-10-17T10:44:11","date_gmt":"2019-10-17T10:44:11","guid":{"rendered":"https:\/\/www.constablevat.com\/?p=96261"},"modified":"2019-10-17T11:38:28","modified_gmt":"2019-10-17T11:38:28","slug":"vat-saving-opportunity-for-partially-exempt-businesses-using-contract-caterers","status":"publish","type":"post","link":"https:\/\/www.constablevat.com\/vat-saving-opportunity-for-partially-exempt-businesses-using-contract-caterers\/","title":{"rendered":"VAT saving opportunity for partially exempt businesses using contract caterers"},"content":{"rendered":"

VAT registered businesses that make exempt supplies (partially exempt businesses) cannot fully recover the VAT incurred on costs. Most partially exempt businesses such as insurers, financial service providers, education providers and health care providers use contract caterers to run their onsite catering (restaurants, vending machines and hospitality). If your business is incurring VAT on the full cost of catering this blog may provide some suggestions as to how that VAT cost can be minimised by structuring your catering arrangements in the most VAT efficient manner.<\/p>\n

Typically, a contract caterer will supply food and drink directly to the consumers (usually staff and visitors) under an agreement with the partially exempt business. In addition to charging the consumer for their meal the business may also pay a charge to the contractor to ensure their presence on site is commercially viable.<\/p>\n

A more VAT efficient relationship is for the caterer to \u2018act as agent\u2019 of the partially exempt business in assisting them in supplying food and drink to the consumer. In everyday language, this means that it is the business, not the caterer, who for VAT purposes supplies the prepared food to the consumer but that this is achieved by using the resources provided by the caterer (staff, food\/sundries, management expertise). This arrangement:<\/p>\n