Value Added Tax

Hot food and premises
The definition of 'hot food' will be clarified to confirm that the sale of all hot food, with the exception of freshly baked bread, is standard-rated. The meaning of 'premises' will be clarified by confirming that the sale of all food sold for consumption in areas adjacent to a retailer (such as a table and chairs outside a café) or in areas that are shared with other retailers (such as food courts in shopping centres) is standard-rated. The measure will have effect on supplies made on or after 1 October 2012.

Approved alterations to listed buildings
Currently the repair and maintenance of a protected building is standard-rated, but the approved alteration of a protected building is zero-rated.

New rules will result in:

• all building materials and construction services supplied in the course of an approved alteration to a protected building becoming subject to VAT at the standard rate

• a narrowing of the circumstances in which the first sale or long lease by a developer of a substantially reconstructed protected building can be zero-rated, so that only buildings reconstructed from a shell continue to benefit from the zero rate.

The measure will have effect on supplies made on or after 1 October 2012. Transitional arrangements will be put in place to protect contracts entered into before 21 March 2012. Anti-forestalling legislation will apply to supplies made on or after 21 March 2012.

VAT standard rate clarifications
It has been clarified that from 1 October 2012 the standard rate of VAT will apply to: self-storage, hairdressers’ chair rental, sports nutrition drinks and holiday caravans.