Case Number: TC09740
Taylor House, London
Appeal reference: TC/2024/05247
VAT – Group 1 of Schedule 8 of Value Added Tax Act 1994 – Note 3 – catering – appeal dismissed
Judgment date: 7 January 2026
Before
TRIBUNAL JUDGE BLACKWELL
MOHAMMEDFAROOQ
Between
SLICE OF PIE LIMITED
Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Respondents
Representation:
For the Appellant: Liban Ahmed, of CTM Tax Litigation Limited
For the Respondents: Mr Imam, litigator of HM Revenue and Customs’ Solicitor’s Office
DECISION
Introduction
Slice of Pie Limited (“SPL”) supply food to nurseries for lunches and afternoon meals. The sole issue in dispute is whether the supply is “catering” and so standard rated. It is agreed that if it is not “a supply in the course of catering” then it will fall within Group 1 of Schedule 8 of Value Added Tax Act 1994 (respectively “Group 1”, “Schedule 8” and “VATA 1994”) and so be zero-rated.
On 31 August 2023 SPL submitted an error correction notice for VAT periods 09/19 to 12/22. A decision was made on 2 May 2024 and notified to SPL on the same date that the supplies were made in the course of catering. On 30 May 2024 SPL requested a statutory review. On 27 August 2024 HMRC issued a review conclusion letter upholding their earlier decision. On 27 September 2024 SPL appealed to the Tribunal.
At the start of the hearing we sought to identify the issues in dispute. HMRC’s statement of case referred to the definition of “hot food” in Note 3 to Group 1 (“Note 3”), which stipulates:
“(3) A supply of anything in the course of catering includes—
(a) any supply of it for consumption on the premises on which it is supplied; and
(b) any supply of hot food for consumption off those premises”
This was not identified as an issue by the appellant in their skeleton argument. HMRC confirmed they were not relying on Note 3. When I asked HMRC to confirm what they took in this case to be the “premises on which it is supplied” they stated these were the nurseries – hence they accepted it would not be “any supply of hot food for consumption off those premises” [my emphasis].
Hearing
At the hearing we heard evidence from:
Mr Russell Brown, a director of SPL; and
Mr Javead Miah, the relevant officer of HMRC.
We accept that both were honest witnesses who attempted to assist the Tribunal.
Findings of Fact
We first make the following findings of primary facts.
SPL has operated for approximately ten years, supplying cooked meals to both private and state-run nurseries, including two nurseries owned by its directors. The method of supply to its directors’ own nurseries is identical to that used for third-party nurseries.
Meals are ordered by nurseries from a weekly menu in advance. All meals are cooked daily from scratch by SPL, including desserts. No pre-made food is purchased.
The cooked meals are delivered in separate containers, typically holding around 20 portions. Each component of the meal – such as protein, carbohydrate, vegetables, sauces, bread, and pudding – is delivered in distinct containers. This “deconstructed” format allows for flexibility in serving, particularly in accommodating dietary restrictions and preferences. It also allows for the food to stay heated for longer than it would do if it were mixed.
When each of the distinct containers is opened the temperature is checked with a probe and recorded on the delivery note. There is no specific pass/fail temperature. This is because the health and safety requirement is that the food is served within two hours of the temperature falling below 63℃. A 20 portion container generally keeps at a temperature above 63℃ for 90 minutes, after which it must be served within 2 hours. So generally a meal must be served within three-and-a-half hours of it being cooked. Generally meals are dispatched between 9:30-10:00 and served by 12 noon, so this requirement is always met. The only exception would be if the child was sleeping at the time of the meal, when they would not be woken for the meal.
An example of a typical weekly menu is as follows:
Day | RED Main | GREEN Main | Served with (Vegetables) | Dessert |
Monday | Lamb Ragout with Petit Pois | Lentil Ragout with Petit Pois | Rosemary Roast Potatoes and Seasonal Vegetables | Banana and Coconut Cookie |
Tuesday | Thai Fish Curry with Lemongrass and Ginger | Roasted Cauliflower and Quorn Balls in Thai Curry Sauce | Basmati Rice, Baby Corn, Cauliflower, Broccoli, Fancy Peas | Creamy Mango Yoghurt |
Wednesday | Beef Hotpot | Veggie Hotpot with Mixed Beans | Crinkle Cut Carrots, Broccoli, Cauliflower, Fine Green Beans, Peas, Sweetcorn | Cherry and Vanilla Slice |
Thursday | Pork and Apple Patties with Tomato Dip | Apple, Beetroot and Yellow Split Pea Patties with Tomato Dip | Homemade Focaccia Squares, Oven Baked Wedges, Peas, Corn | Marmalade Cake |
Friday | Spring Chicken Casserole | Spring Vegetable and Lentil Casserole | Crunchy Croutons, Penne Pasta, Broccoli, Cauliflower, Carrots, Fancy Peas | Dragon Fruit Swirls |
The menus and meals are designed so the special green meals look, as far as possible, as close to the main red meals, so the children do not feel they are treated differently. This is a unique selling point of SPL. The vegetables are common to both green and red meals, as are the desserts.
The menu is refreshed 3 or 4 times a year. The options for each day alternate, so a child who only attends nursery on certain set days each week experiences the full range of the menu and so gets maximum variety.
A part of the service offered by SPL is they educate nurseries. So if, for example, they say a child has an allergy to peas they will say that the child likely has an allergy to other legumes, such as beans.
Upon delivery, nursery staff undertake a series of tasks including:
sanitising surfaces and washing hands.
checking delivery contents against the delivery sheet, with particular attention to “special” meals prepared for children with allergies or dietary preferences.
decanting bulk containers into smaller serving bowls for distribution across multiple nursery rooms.
weighing and portioning each meal component (protein, carbohydrate, vegetables) to 100g per child, with periodic checks to ensure consistency. So, for example, if a table seats 5 children all of whom have the “normal” menu then 500g of protein and 500g of vegetables will be weighed out and placed into Tupperware boxes referred to as “bowls”. The member of staff that supervises each table will then, by sight, plate that into individual portions.
preparing and serving “special” (either preference or allergy related) meals separately using designated red plates, with strict allergen protocols including re-sanitisation between servings. In addition anaphylactic-safe meals are placed in sealed plastic bags.
one special category of preparation is “weaner/blitzed food” because there is a requirement to serve certain dishes at a certain consistency, and this is performed by the nursery staff.
counting and setting aside “normal” meal crockery and cutlery;
The preparation process includes the handling of desserts, which are also weighed or counted, and served with similar allergen precautions. Special puddings can be prepared one allergy at a time, with surfaces and hands re-sanitised between each.
After service, all crockery and cutlery are washed, with special plates cleaned and stored separately to maintain allergen safety. Food containers are returned to SPL for industrial cleaning.
The preparation process is repeated for a second meal service (“tea”) later in the day.
SPL estimates that it produces approximately 2,500 meals per day, of which around 10% are “special” meals requiring additional preparation. These include a wide range of dietary requirements, such as vegetarian, vegan, allergen-free, and texture-modified meals (e.g. blitzed food for weaning children).
The SPL website stated (as viewed on 15 August 2025) that meals would be delivered “piping hot” and temperature probes and suitable containers would be provided with the orders.
Meals are generally served in several different rooms in a nursery, rather than in a common dining hall.
The contracts between SPL and the nurseries require that the food is consumed on the nursery premises (clause 8) and also specify that the food will be supplied hot:
“10.6 A minimum order of 20 meals a day is required to keep the temperature of the food at or above the required level until the time of serving. The Company cannot guarantee that the required temperature will be maintained on orders of less than 20 a day.
10.7. If The Customer does not meet with the minimum level of 20 meals per day after 12 months of commencement of The Contract, service will be discontinued.”
The invoicing unit is meals (for example lunch for £2.60 or lunch and tea at £3.60) rather than per item (e.g. for each Banana and Coconut Cookie).
The Law
Subsection 30(2) of VATA1994 states that supplies of the goods and services described in Schedule 8 VATA 1994 are zero rated. So far as is relevant, Group 1 states:
“Group 1
Food
The supply of anything comprised in the general items set out below, except—
(a) a supply in the course of catering; and
(b) a supply of anything comprised in any of the excepted items set out below, unless it is also comprised in any of the items overriding the exceptions set out below which relates to that excepted item.
General items
Item No.
1 Food of a kind used for human consumption.
…
Notes:
(1) “Food” includes drink.
…
(3) A supply of anything in the course of catering includes—
(a) any supply of it for consumption on the premises on which it is supplied; and
(b) any supply of hot food for consumption off those premises;
(3A) For the purposes of Note (3), in the case of any supplier, the premises on which food is supplied include any area set aside for the consumption of food by that supplier’s customers, whether or not the area may also be used by the customers of other suppliers.
(3B) “Hot food” means food which (or any part of which) is hot at the time it is provided to the customer and—
(a) has been heated for the purposes of enabling it to be consumed hot,
(b) has been heated to order,
(c) has been kept hot after being heated,
(d) is provided to a customer in packaging that retains heat (whether or not the packaging was primarily designed for that purpose) or in any other packaging that is specifically designed for hot food, or
(e) is advertised or marketed in a way that indicates that it is supplied hot.
(3C) For the purposes of Note (3B)—
(a) something is “hot” if it is at a temperature above the ambient air temperature, and
(b) something is “kept hot” after being heated if the supplier stores it in an environment which provides, applies or retains heat, or takes other steps to ensure it remains hot or to slow down the natural cooling process.
(3D) In Notes (3B) and (3C), references to food being heated include references to it being cooked or reheated”
What constitutes “catering” has been considered in C&E Comrs v Safeway Stores plc [1997] STC 163; C&E Comrs v Compass Contract Services UK Limited [2006] EWCA Civ 730; [2006] STC 1999; and Alan Desmond Manifold t/a Easy Living Meals on Wheels v HMRC [2016] UKFTT 676 (TC).
In Safeway Keene J stated:
“In my judgment whether a particular supply is ‘in the course of catering’ is a matter of fact and degree. There will be a range of factors to be taken into account by the body which is making the decision. Those factors would seem to me to include such matters as whether the food is indeed supplied in connection with an occasion or other event; the degree of preparation which remains to be carried out by the recipient is likely to be a relevant consideration, as is the presentation of the food itself—in other words, is the food in a form where one would ordinarily put it on the table with no further steps being taken? One would want to bear in mind whether crockery and cutlery are provided along with the food itself and any other of the usual ancillary items which go with a meal. Whether it is delivered, or not, by the supplier may often be a highly material factor. Whether it is served by the supplier to those eating it, at the place where consumption occurs, will also be a relevant factor.
I do not propose to list any more factors. The ones I have listed are not intended to be exhaustive. I recognise there may well be other considerations which will arise in the individual case. I share the tribunal’s view in this appeal that no one factor by itself is likely to be decisive and it would be wrong for the tribunal to focus upon one factor in any case to the exclusion of all others. These are decisions to be made in the round, taking account of all considerations of the kind to which I have referred.
The test itself has to be an objective one: would the ordinary person regard what was being done as being ‘in the course of catering’?...”
Discussion
We first follow the parties’ interpretation of the law and adopt a balance sheet approach, first discussing those factors that support classification as “catering” and then those that weigh against the supply being “catering”. We then stand back and make an assessment on whether the supply is catering, which we have found it to be.
After doing this we then suggest an alternative method to the same answer having regard to Note 3. Whilst the parties have not argued this we consider it to be the correct approach. Note 3 is part of the legislation and cannot be ignored by the Tribunal, even if the parties chose not to make submissions on it. As we did not have submissions on this matter at the hearing, we circulated a draft of this decision to the parties and invited them to make written submissions with regard to Note 3. We have taken those submissions fully into account when issuing this decision. Further, whilst the presenting officer at the hearing disclaimed reliance on Note 3, HMRC’s statement of case refers to it (eg para [24]-[29], [42]). Hence, especially as the appellant has been given the opportunity to make post-hearing representations, we do not consider it procedurally unfair to consider this in our decision.
Factors that support classification as “catering”
Hot Food Supplied for Immediate Consumption
The food is delivered in insulated containers designed to retain heat. Meals are delivered hot and ready to eat, with no reheating or cooking required by the nursery. Indeed they are described on the SPL website as “piping hot”.
Presentation and Packaging
Food is delivered in gastro trays. The presentation is consistent with commercial catering rather than retail food supply.
Minimal Preparation by Nursery Staff
The nursery staff’s actions (detailed above at [16]-[18], including plating, checking allergies etc) do not amount to significant food preparation.
Menu-Based Ordering System
Nurseries select meals from a rotating menu, refreshed several times a year. This resembles a catering service offering planned meal options.
Delivery to Final Consumer
Meals are delivered directly to nurseries for consumption by children. The food is not resold or redistributed, and contracts restrict consumption to the nursery premises.
Contractual Restrictions
Contracts stipulate that food must be consumed on the nursery premises and not sold onward. This supports the view that the supply is tailored and controlled, as in catering arrangements.
Unit-Based Invoicing
Invoices are issued per meal unit (e.g. “Lunch” or “Lunch and Tea”), not per food item. This aligns with catering practices where meals are priced per person.
Occasion
No special social occasion or event is associated with the supply. Meals are for routine nursery feeding. However the food is provided for regular meals, rather than just a one-off or to have in. We consider that supplying cooked and largely prepared food for regular meals points towards, rather than against, catering.
Delivery
The food is delivered by SPL.
Factors that weigh against the supply being “catering”
No Facilities Provided by SPL
SPL does not provide premises, seating, cutlery, or staff to assist with serving.
Preparation by Nursery Staff
We watched a video showing the work undertaken by nursery staff. Exhibit RB6 shows the man-hours spent on preparation tasks at nurseries. The tasks are further detailed above at [16]-[18].
Meals are delivered “deconstructed” in separate containers for protein, carbohydrate, vegetables, bread, and dessert. Nursery staff must weigh and portion each component (typically 100g per child), with checks for consistency. Special meals for allergies or preferences require separate preparation on designated plates, with re-sanitisation between servings. Desserts undergo similar preparation, including allergen-specific handling and plating.
Preparation includes sanitising surfaces, washing hands multiple times, and managing allergen protocols. Nurseries decant bulk containers into smaller serving bowls for multiple tables, then portion meals individually.
Some meals require texture modification (e.g., blitzing for weaning children), which is performed by nursery staff. The appellant supplies up to 2,500 meals daily, with approximately 10% being “special” meals requiring additional steps.
Evaluative conclusion
Taking all factors into account, the ordinary person would regard the supply as catering: hot, ready-to-eat meals delivered for immediate consumption, ordered from a menu, and presented in a manner consistent with commercial catering. The additional steps required by nurseries, though extensive, do not amount to significant food preparation.
If the parties’ legal analysis is correct (which ignores Note 3) we would dismiss the appeal on that basis. However, we consider the same result is achieved by applying Note 3. We consider that to be the correct analysis as Note 3 is part of the statute and so cannot simply be ignored by mutual agreement of the parties.
Note 3
It will be recalled that Note 3 states:
“(3) A supply of anything in the course of catering includes—
(a) any supply of it for consumption on the premises on which it is supplied; and
(b) any supply of hot food for consumption off those premises;”
To apply this it is necessary to identify “premises on which it is supplied”. The only two options would appear to be the nursery or the SPL kitchen where the food is cooked. HMRC say the relevant premises are the nurseries. SLP indicated they agreed with this in their post-hearing written submissions.
If the relevant premises are the nurseries, then the supply is catering as it is supplied for consumption on those premises. That is apparent from the fact that it is delivered to the premises and the contract requires the food is consumed on the nursery premises.
If the relevant premises are the SPL kitchens then it is a supply of hot food for consumption off those premises. It is “hot food” (applying the definition in Note 3B) because it is at a temperature above the ambient air temperature when it is supplied to the nurseries and (any of the following would alone be sufficient):
has been heated for the purposes of enabling it to be consumed hot;
has been heated to order;
has been kept hot after being heated, because SPL has stored it in an environment which retains heat: we were told that after the food is cooked but before the food leaves the SPL kitchens it is kept in an environment that retains heat; it is also kept hot as SPL has taken “other steps to ensure it remains hot”, by providing the food in deconstructed format, that keeps it hot longer than it otherwise would be. We consider this to be a purpose of the deconstructed format, although we acknowledge that there are other reasons motivating the deconstructed format too;
it is provided to a customer in packaging that retains heat – the black “thermal hot boxes” shown in the video are clearly an insulating material (such as expanded polypropylene), further the 20 unit stainless steel gastro-trays that are covered and wrapped in cling film inside those boxes are also packaging that retains heat – and also in packaging designed for hot food, namely the stainless steel gastro trays which are visible on the videos. The document “Slice of Pie Food Packaging Process” explains that the cling film serves a dual purpose of preserving both heat and hygiene.
is advertised or marketed in a way that indicates that it is supplied hot, specifically the website referred to food being delivered “piping hot”. The contracts also guarantee that (for orders over 20 portions) they will be supplied hot.
In SPL’s post-hearing written submissions it is submitted the “question is whether the food is ‘held out for sale for consumption’ on those premises.” However, this mis-states the test. Note 3 only asks whether it is “any supply of it for consumption on the premises on which it is supplied.”
SPL’s post-hearing written submissions also submit that:
“The Appellant relies on the principle, confirmed in Brockenhurst College (UT paras 26–27; CJEU paras 28 and 31), British Airways [1990] STC 643, and Wakefield College [2018] EWCA Civ 952 at paras 52, 55 and 60, that the physical consumer of the food is not the VAT customer. The customer is the contractual recipient — here, the nursery.”
We do not find these cases of assistance or, indeed, relevance. Brockenhurst College concerned item 4 in Group 6 of Schedule 9 of Value Added Tax Act 1994 – a completely different issue. Also, there the supply of food was made by the educational institution, not to it. Wakefield College concerned whether a supply constituted an economic activity – an issue not in dispute in this case. British Airways concerned whether the supply on in-flight catering was a separate supply to the air transportation.
SPL’s post-hearing written submissions also submit that:
“As Note 3(b) requires food to be “held out for sale for consumption” to the person to whom the supply is made, and the nursery does not consume the food, the Note cannot apply in law. The children are mere beneficiaries, not recipients of the supply, and their consumption is not relevant to VAT.
Note 3(b) requires the supplier to be holding the food out to the customer for consumption on the premises. Therefore, the supply cannot, as a matter of law, be a supply of food held out for consumption to the nursery. The physical consumption of food by beneficiaries (the children) does not determine the identity of the VAT customer.”
We accept that the supply is made to SPL. The fact that the food is consumed by the children does not prevent it from being “consumed on the premises” within the meaning of Note 3. The provision does not require the contractual recipient to be the person who eats the food; it simply stipulates where consumption occurs. For example, if a parent purchases a meal for a child at a fast-food restaurant, the supply is to the parent, yet the food is consumed on the restaurant premises. That scenario illustrates that physical consumption by a third party does not disapply Note 3.
Thus regardless of whether the relevant premises are the nurseries or the SPL kitchens, the supply is deemed to be catering (and so standard rated) in consequence of Note 3. We note that it is HMRC’s position that the relevant premises are the nurseries. However, as we have not heard argument on that point we would rather not express a view.
Conclusion
It follows that the supplies are standard rated and the appeal must be dismissed.
Right to apply for permission to appeal
This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.
Release date: 07th JANUARY 2026
