Morrisons faces a £17million bill after losing a long-running VAT battle with HM Revenue and Customs over rotisserie chickens.
The High Court has ruled that the supermarket’s whole cooked ‘cool-down’ chickens are subject to the standard 20 per cent tax rate for hot food.
The decision relates to former Chancellor George Osborne’s 2012 ‘pasty tax’, when the Treasury decided all hot takeaway food sold by bakeries and supermarkets, including Cornish pasties, should be subject to VAT.
The Government later backtracked and exempted products that are sold or eaten cold.
Morrisons said its chickens should not be taxed as customers eat them cold or reheat them. But the court said the supermarket sold the chickens with packaging labelled ‘caution: hot product’ and that
they would stay ‘well above the ambient temperature’ two hours after being taken out of the grocer’s hot cabinets. Morrisons last night declined to comment on the decision.
Out of pluck: The High Court has ruled that Morrisons’ whole cooked cool-down chickens are subject to the standard 20% tax rate for hot food
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