VRS13040 - Temporary 5% VAT rate on hot food and on-premises consumption: Example of direct calculation method

(Hot takeaway food retailer also selling cold soft drinks or restaurant selling food, beverages and alcoholic drinks).

Step      Description                                                                                                                                       Amount

1.            Add up your DGT for this tax period                                                                          £200,000

2 .          Add up the fully-adjusted ESP of your standard rated goods                      £15,000

  1.           Deduct step 2 from step 1. This is your reduced rate sales                           £185,000

  2.           Multiply the figure at step 2 by 1/6 (VAT at 20%)                                             £2,500

  3.           Multiply the figure at step 3 by 1/21 (VAT at 5%)                                              £6,851.85

  4.           Total at step 4 + total at step 5                                                                                  £9,351.85

                This is your output tax.