Charged 17.5% VAT in Chinese restaurant!

Laura_Scotland

Tonight I went to the Dragon Way restaurant in Edinburgh with 6 members of my family and while the food was ok, the service was terrible! I've wrote a long review on Qype already so I won't bore you all with the details apart from this....

When we finally thought we were getting the bill after waiting ages, the waitress said she had just realised that the last round of drinks wasn’t on it so was asking everyone what we’d had! My dad was honest and told her the truth! So, she then brought back two receipts and had added the total together. My dad was paying and was going to give a very small tip when we noticed that they had added a 10% service charge already. Also they had charged VAT at 17.5% instead of the 15% it is at the moment! But, he’d had enough and decided to just pay it.


Anyway what I was interested in is: Is this illegal? Will the extra 2.5% have just been taken by the restaurant or will they actually 'declare' it with the rest of their VAT? Don't really know how it all works, but surely it's not allowed?

Meepster

The 2.5% reduction in VAT was not a legal requirement, so companies did not have to pass on the reduction.

TBQH though, a lot of companies have passed on the saving, but haven't adjusted tills, paperwork etc. due to the costs involved...

So no they aren't acting illegally unfortunately, although that doesn't make up for the ok food and poor service :-(

Oh and hello from across the Forth

MarkyMarkD

Eh?

The 2.5% reduction in VAT WAS a legal requirement. But there was no requirement for retailers to reduce prices to reflect it - i.e. they could keep the difference.

I think that is what you meant, mwillets.

As the prices on the menu would have included VAT, the error in stating the rate of VAT on the receipt as 17.5% will presumably not have affected the price which should have been paid.

Meepster

MarkyMarkD wrote: »

I think that is what you meant, mwillets.

Yup, I should really stop drinking and posting... *hic*

Thanks for clarifying that...

JasonLVC

Have they actually charged you 17.5% or have they given you a receipt with the words 17.5% printed on the receipt but charged you 15% in terms of the actual charge?.

You should do a calculation to find the truth. If the bill was £100.00 cash then the VAt fraction is 3 divdided by 23 = £13.04 whereas if they really have charged you 17.5% then that will be 7 dividided by 47 = £14.89

If they have charged the wrong (or is that wong;)) rate of VAT then you can either have a word with them and ask for the difference back or grass them up the local HMRC VAT office as they are likely iover-charging everyone and making a pretty packet - which is fraud.

Laura_Scotland

JasonLVC wrote: »

Have they actually charged you 17.5% or have they given you a receipt with the words 17.5% printed on the receipt but charged you 15% in terms of the actual charge?

Yes the words 17.5% were on the receipt but I never thought of checking the amount, will have a look next time I see my dad. I'm assuming we probably were charged 17.5% though as there was a mix-up with the menus at the start - some had different pages (one didn't have soups but we ordered 3 from the other one) and we were told some were the old menus but the prices were the same in both. I don't think we'll ask for it back but I was interested in if it was illegal as I was considering reporting it!

Thanks for your help everyone! I assumed everywhere had to change their prices

MarkyMarkD

JasonLVC wrote: »

Have they actually charged you 17.5% or have they given you a receipt with the words 17.5% printed on the receipt but charged you 15% in terms of the actual charge?.

You should do a calculation to find the truth. If the bill was £100.00 cash then the VAt fraction is 3 divdided by 23 = £13.04 whereas if they really have charged you 17.5% then that will be 7 dividided by 47 = £14.89

If they have charged the wrong (or is that wong;)) rate of VAT then you can either have a word with them and ask for the difference back or grass them up the local HMRC VAT office as they are likely iover-charging everyone and making a pretty packet - which is fraud.

What you say simply isn't true, Jason.

Businesses which primarily supply individuals, rather than businesses, are required to quote their prices inclusive of VAT. So it is irrelevant what rate of VAT has been used to calculate the price - the inclusive price is the price you agree to pay when you order off the menu.

Dave101t

just to confuse the issue: doesnt food and drink supplied via resteraunts have differing vat rates?

FatAndy

Dave101t wrote: »

just to confuse the issue: doesnt food and drink supplied via resteraunts have differing vat rates?

Don't think so. Most food and drink items are zero rated for VAT if you buy them 'unprepared' but are standard rated if they've been 'prepared'. So if you go into a supermarket and buy some veggies and meat and prepare your own meal you don't pay VAT but if you go into a restaurant and buy the same ingredients already cooked you pay VAT.

Given that alcohol, soft drinks and bottles of water are standard rated however you buy them I suspect that pretty much anything you would buy in a restaurant will be standard rated.

JasonLVC

MarkyMarkD wrote: »

What you say simply isn't true, Jason.

Businesses which primarily supply individuals, rather than businesses, are required to quote their prices inclusive of VAT. So it is irrelevant what rate of VAT has been used to calculate the price - the inclusive price is the price you agree to pay when you order off the menu.

The OP clearly has a receipt that has VAT at 17.5% on it.....how else could they know they've been charged too much?.

The question isn't about whether they were charged VAT, but at what VAT rate. It is illegal for a trader to charge VAT at 17.5% when the current VAT rate is 15%. If the menu's are 'VAT inclusive' then why has the OP been given a VAT invoice with 17.5% on it?.

I visit many restaurants and take away and receive a VAT receipt - indeed, I always ask for one as I cannot reclaim VAT through my business without a valid VAT receipt.....

JasonLVC

Dave101t wrote: »

just to confuse the issue: doesnt food and drink supplied via resteraunts have differing vat rates?

Fat Andy is right - catering which involves the preperation or serving of cold or hot food is always standard rated (VATable).