Client Story
How we structured a Hitchin independent retailer's VAT and saved £5,400
Client D runs a deli and food shop in Hitchin's market town centre, selling fresh and packaged foods, hot food to take away, and a small cafe area. Having registered for standard VAT, they were applying 20% across the board and overpaying on the substantial zero-rated cold and packaged food lines.
We reviewed the sales mix. Eat-in food, hot drinks and hot takeaway are standard-rated, but cold takeaway food, packaged groceries, bread, cheese and ingredients are zero-rated. We set up the till to categorise sales correctly, reviewed the product range against HMRC's food VAT rules, and corrected the recent returns to reclaim the overpaid VAT on the zero-rated lines.
Total outcome: VAT saving of £5,400 a year by correctly separating standard-rated and zero-rated sales, a reclaim of overpaid VAT from recent returns, and the till set up to handle the split automatically going forward.