Understanding VAT in UK Meal Deals: A Detailed Look at Tesco’s Pricing Strategy

• FT Alphaville received queries about VAT treatment in UK meal deals.
• HM Revenue & Customs guidance on VAT for meal deals is vague.
• Supermarkets might prioritize discounting standard-rated items to minimize VAT.
• At Tesco, a meal deal costs £4, offering a discount of about 34 percent.
• Example items: Birthday cake sandwich, Kettle Chips, and Harry Brampton’s iced tea.
• Total cost without deal was £6.05, discounted to £4.
• VAT was charged on crisps and iced tea at 20 percent.
• Each item’s price, including VAT, is discounted to match the meal deal price.

Source: ft.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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