How we helped a Golborne Road cafe owner cut their VAT bill by £5,400
Client M runs a Moroccan cafe and food shop on the Golborne Road, selling a mix of eat-in meals, hot takeaway, and cold packaged goods and ingredients to take home. The business had registered for standard VAT but wasn't separating the different rates correctly, applying 20% across the board and overpaying on the zero-rated cold food and ingredients.
We reviewed the sales mix carefully. Eat-in food and hot takeaway are standard-rated, but cold takeaway food and packaged ingredients and groceries to take home are zero-rated. We set up the till to categorise sales correctly, reviewed the menu and product range against HMRC's food VAT rules, and corrected the recent VAT returns to reclaim the overpaid VAT on the zero-rated lines.