VAT on supply of canteen foods

Dublin Chick

Hi all,

I have a query and will try and give u as much information as possible. My father runs a canteen for a medium sized company in Dublin. He is paid a monthly retainer for this and the food is paid for by him. The Canteen food is not for profit. In this case does he need to pay Vat on his sales?

Thank you so much for any information you can provide me with.

DC

kranbo

He will have to pay VAT on the monthly retainer and all sales

kennyb3

kranbo wrote: »

He will have to pay VAT on the monthly retainer and all sales

How do you know that without asking the level of turnover?

ssbob

kranbo wrote: »

He will have to pay VAT on the monthly retainer and all sales

kennyb3 wrote: »

How do you know that without asking the level of turnover?

First of all is your father registered for VAT? If his turnover(Retainer + Food sales) is going to exceed €37,500 for the year then he needs to register for VAT.

VAT is neutral for businesses anyway so basically he will not gain or lose anything from VAT, he will be able to reclaim his VAT on purchases against his VAT on sales.

Dublin Chick

ssbob wrote: »

First of all is your father registered for VAT? If his turnover(Retainer + Food sales) is going to exceed €37,500 for the year then he needs to register for VAT.

VAT is neutral for businesses anyway so basically he will not gain or lose anything from VAT, he will be able to reclaim his VAT on purchases against his VAT on sales.

Thanks for your responses. Yes he is registered for VAT and the turnover will exceed the €37,500.

He will end up paying the Vat as the food and drinks are for re-sale the rate of Vat is 13.5% & 21% respectively as far as I understand.

Although when purchasing food and drinks the rate of Vat is 0% & 21 % respectively so therefore he will not be able to reclaim Vat on purchases of food.

Thanks for all your help.

DC

puppetmaster

But i would imagine that including 21% wouldnt be misunderstood by the imploying company as Profit.

So if he adds the 21% to the cost to the customer, No loss.
Everyone else does. Matter of law really. Cant avoid payin the taxman even for your chips.

ssbob

puppetmaster wrote: »

But i would imagine that including 21% wouldnt be misunderstood by the imploying company as Profit.

So if he adds the 21% to the cost to the customer, No loss.
Everyone else does. Matter of law really. Cant avoid payin the taxman even for your chips.

+1

kranbo

kennyb3 wrote: »

How do you know that without asking the level of turnover?

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I would have assumed the question implied that they would had exceeded the turnover - also medium size company canteen would easily turnover 2k weekly

kennyb3

kranbo wrote: »

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I would have assumed the question implied that they would had exceeded the turnover - also medium size company canteen would easily turnover 2k weekly

Assume nothing and ask everything would be my motto. You could easily give the wrong advice by assuming something that is incorrect. It was a valid question.

antoinolachtnai

There is a technical situation in relation to canteens, if the canteen does not cover its own costs, as this one apparently does not.

http://www.revenue.ie/en/practitioner/tax-briefing/archive/62/tb09.htm

It's a bit obscure, and the client company or the operator will need to take some advice on this.

nipper banks

antoinolachtnai wrote: »

There is a technical situation in relation to canteens, if the canteen does not cover its own costs, as this one apparently does not.

http://www.revenue.ie/en/practitioner/tax-briefing/archive/62/tb09.htm

It's a bit obscure, and the client company or the operator will need to take some advice on this.

Good link. It may be obscure, but the Revenue will implement this. The bottom line is that they will assume VAT is included in the prices charged to the canteen customers, as it legally must be, and will hold the operator accountable for this.