VAT on restaurant meals?

[lyka]

Hello,

Do restaurants charge VAT on every meal consumed even if it is a cold food such as a salad? can VAT be inclusive of price? can it be claimed back?

Another question:
Does a newly formed company trading as a restaurant have to charge VAT? before the 83,000 threshold or after?

 

[STDFR33]

I do not know why you are persisting to wing it. You might as well go directly to the insolvency section of the forum. Do not pass go. Do not collect $100.

Salad, eaten in, is vatable.

Yes, of course you can quote an inclusive VAT price. If your business is only to consumers, they’ll expect it.

Can what be claimed back?

No, a new company doesn’t have to charge VAT immediately. There are many exceptions, however.

The threshold for compulsory registration isn’t £83,000.

 

[bovine]

Everything eat in is vat able. Takeaway everything hot is definitely vat able. Anything else gets a bit more complicated.Most places sell a vat inclusive price. Most consumers don't understand vat, so don't include it
Vat is only chargeable when you meet the threshold. If you expect to get to the threshold, price it so the price doesn't change when you do charge vat. Customers wouldn't appreciate the price hike. So just take higher margin before you have to take off the vat.

 

[lyka]

I do not know why you are persisting to wing it. You might as well go directly to the insolvency section. Do not pass go. Do not collect $100.

What do you mean

 

[lyka]

Everything eat in is vat able. Takeaway everything hot is definitely vat able. Anything else gets a bit more complicated.Most places sell a vat inclusive price. Most consumers don't understand vat, so don't include it
Vat is only chargeable when you meet the threshold. If you expect to get to the threshold, price it so the price doesn't change when you do charge vat. Customers wouldn't appreciate the price hike. So just take higher margin before you have to take off the vat.

Perfect. Thanks. Is VAT charged after the threshold claimable?

 

[Mr D]

Expect to hit VAT level within first few months - where you must register.
Once you register for VAT you charge it on all applicable sales - basically you become an unpaid tax collector for the government collecting 1/6th of what customers pay for the meals as tax.

 

[STDFR33]

Perfect. Thanks. Is VAT charged after the threshold claimable?

What claimable threshold?

 

[kulture]

I am moving this to the accounts forum where someone there will eventually answer more accurately than here.

If you are registered for VAT, you can claim back most VAT that your business has been charged. If you are registered for VAT you MUST charge VAT on what you sell although there are exceptions that an accountant will advise you on.

If your turnover exceeds, or is likely to exceed the VAT threshold in any 12 month period you must register for VAT.

You have to PAY to HMRC any VAT that you have charged. You offset this payment by any VAT you have been charged from your suppliers.

The VAT threshold is currently £85,000. I would expect any restaurant to exceed this in its first year, so you should register immediately, especially as your set up costs almost certainly include VAT and could thus be claimed back.

 

[Newchodge]

You don't claim VAT on what you sell. If you are VAT registered you charge VAT on everything you sell in a restaurant and pay it to HMRC. You CLAIM VAT on everything that you have bought that has VAT charged on it.

Did you get ANY advice before deciding to open your restaurant?

 

[Mitch3473]

What do you mean

I think what STDFR33 is implying is that due to the type of questions you are asking you are struggling to grasp the basics and if so it could lead to certain failure, especially in the catering trade which is known for its high start up mortality rate, approx 60% within the first year.

 

[lyka]

I think what STDFR33 is implying is that due to the type of questions you are asking you are struggling to grasp the basics and if so it could lead to certain failure, especially in the catering trade which is known for its high start up mortality rate, approx 60% within the first year.

No worries

 

[lesvatadvice]

Book an hour with your Accountant, and take a calculator.
If you start in business and assume VAT will not apply to your sales, you will get a nasty surprise when your turnover exceeds the threshold!
But, when you do register, you are entitled to claim some input tax incurred pre-registration. This will help to soften the blow!