Tax fraud.

Mr_Singleton

Was in a McDonald's recently where the person I was with ordered a meal. At no point were they asked if it was to eat IN or OUT. The receipt showed it as eat out even though they asked to eat in when the food arrived.

Next time they specifically told the server 3 times when ordering it was eat IN. Receipt yet again showed as eat OUT.

Why are McDonald's (and no doubt other American fast food outlets) allowed to so blatantly defraud HMRC of the VAT? Why aren't HMRC doing something about It?

DoaM

I thought VAT was due on hot food irrespective of eat in or out? Also, if they have dine-in facilities then they're a restaurant so VAT is due anyway. This link seems to support my belief.

George_Michael

Mr_Singleton wrote: »

Why are McDonald's (and no doubt other American fast food outlets) allowed to so blatantly defraud HMRC of the VAT? Why aren't HMRC doing something about It?

No fraud, blatant or otherwise.
Hot food is liable for VAT whether it's eat in or takeaway.

Pennywise

As said above, VAT is irrelevant here, there's VAT on a takeaway and VAT on eating in. It'll be more for internal management figures, i.e. knowing how many people eat in/takeaway is useful when planning future restaurant layouts or renovations of existing outlets.

The till staff are just pressing the wrong button rather than it being a deliberate fraud!

If you look on your till receipt, at the bottom will state the VAT charged, which you will find is the same whether it's eat in or takeaway.

Without going in to detail, there may be the odd item off the menu which can become zero rated if it's not eaten in, but if that's the case you won't have been charged VAT and the zero rated item would be shown on the receipt in the VAT charged section at the bottom with a zero against it in the VAT column.

At the end of the day, McDonalds will be paying over to HMRC the same figure of VAT as shown on your receipt (less other adjustments such as allowable input VAT). Their systems will have been checked over by HMRC to ensure compliance.

Mr_Singleton

George_Michael wrote: »

No fraud, blatant or otherwise.
Hot food is liable for VAT whether it's eat in or takeaway.

I don’t believe the meal of a salad, muffin and chocolate milkshake was sold hot.

Mr_Singleton

Pennywise wrote: »

If you look on your till receipt, at the bottom will state the VAT charged, which you will find is the
At the end of the day, McDonalds will be paying over to HMRC the same figure of VAT as shown on your receipt (less other adjustments such as allowable input VAT). Their systems will have been checked over by HMRC to ensure compliance.

Right... thanks for the info I’m guessing that the problem here is that regardless of VAT status the price stays the same ie McDonalds pocket the 20% vat element if it doesn’t have to pay it to HMRC.

Pennywise

Mr_Singleton wrote: »

I don’t believe the meal of a salad, muffin and chocolate milkshake was sold hot.

So what does the receipt show re VAT? At the bottom will be the VAT breakdown. If it shows VAT has been charged, then that's been paid over to HMRC.

But whether hot or cold - you're still missing the point. Anything sold in the course of "catering" is standard rated.

Like I say, McDonalds will have been heavily audited by HMRC so if they're charging VAT (as per your receipt) it will be getting paid over to HMRC. If they're not charging VAT (as per your receipt), they've not charged it, so nothing to pay to HMRC. Either way, HMRC gets the VAT you've paid.

DoaM

Mr_Singleton wrote: »

I don’t believe the meal of a salad, muffin and chocolate milkshake was sold hot.

Did you look at that link I posted? It doesn't matter - they're a restaurant so VAT applies regardless.

Mr_Singleton

Thanks all.. . I now feel educated on the matter.

JCS1

Certain qualifying cold items can be classed as zero VAT if taken away to eat. It's a complex area, as needs to be taken outside the area of control of the supplier, and it's only certain items.

JCS1

DoaM wrote: »

Did you look at that link I posted? It doesn't matter - they're a restaurant so VAT applies regardless.

That's not quite true. If items taken away the area of control of the restaurant, and the item qualifies, then it can be sold as zero rated VAT.