Restaurant VAT in the UK (20%, food, wine, takeaway)

Written by Marco Azzari on 26 August 2026

This page is for operators costing a menu, not for a consumer VAT quiz. Rates below are the UK rates in force today: standard 20%, reduced 5%, zero 0%. The temporary hospitality cut (5%, then 12.5%) ended on 31 March 2022. Always confirm with HMRC if you are filing. Wine Margin is not your accountant.

The three rates (country, not just hospitality)

Source: VAT Act 1994, Schedule 8 Group 1; HMRC VAT Notice 709/1, Catering and takeaway food.

In the room: food and wine are the same rate

If you serve food for consumption on your premises, that is catering. It is standard rate, 20%, including the food. Wine poured at that table is also 20%.

Do not write internal costing stories that say "wine is taxed more than food" for service in the room. For eating in, both sit at 20%. Your accountant will catch the comparison, and it is the comparison that is wrong, not the need to cost VAT. Alcohol duty is a different tax, already inside the price your supplier charges you.

The silent leak on a wine list is different: prices set years ago, from memory, never rebuilt with 20% in the true cost. That leak is real. It does not need a false tax story. How to price a wine list.

Takeaway and delivery: cold food can drop, alcohol does not

If food (not alcoholic drinks) is sold cold to be taken away or delivered, much of it is zero-rated. Hot takeaway food is standard-rated at 20%, the same as eating in. Food eaten in your seating area is catering at 20%, even if it came in a takeaway box.

Alcoholic drinks stay at 20% even in the bag. A bottle of wine to go (if your premises licence allows off-sales) is not zero-rated food.

If you cannot tell takeaway from eat-in at the till, HMRC's logic is that you do not get to pretend. Cafés and bakeries with a few tables live on this knife. Restaurants that only serve at table mostly live in 20% and should cost that way.

Hotel F&B

Rooms, breakfast, the dinner, the minibar and the wine list in the restaurant are all standard rate in the UK. A package price (dinner, bed and breakfast) does not change the rate. It only hides how much the wine is really earning, so cost the wine on its own line before it disappears into the package. A discretionary service charge is outside VAT; a compulsory one is part of the price and carries 20%. Your accountant should sign off how your EPOS handles both.

What to do in the costing sheet

1. Separate eat-in from takeaway in the EPOS if you have both.
2. Cost wine at 20% for anything poured or sold as a drink.
3. Never zero-rate alcohol "because it went out with the food."
4. Menu prices to consumers include VAT. Rebuild old selling prices from true cost. Do not add 20% on top of a price that already had it, do not keep a price built on the 2021 hospitality rate, and do not ignore it because "we have always done it this way."

This page should be updated when the government changes a rate. Until then, other Wine Margin articles should link here instead of restating the law.