VAT on Delivery Charges UK: What Restaurants Need to Know

VAT on delivery charges in the UK is one of those areas where the rule sounds simple — delivery charges follow the VAT treatment of the goods supplied — and the application turns out to be more complex than that.

For UK restaurants on Deliveroo, Uber Eats, and Just Eat, the question comes up in two related but distinct ways. First: what VAT rate applies to the delivery charge your customer pays? Second: what VAT applies to the platform's commission and service fees? This guide covers both, with the HMRC rules that govern each.

The general principle: delivery charges follow the supply

HMRC's starting position (from VAT Notice 700, section 8.3 — "Delivery charges (postage and packing)") is that the VAT treatment of a delivery charge generally follows the VAT treatment of the goods being delivered. If you deliver standard-rated goods, the delivery charge is standard-rated. If you deliver zero-rated goods, the delivery charge can be zero-rated.

For food delivery specifically, this means the VAT treatment of the delivery charge depends on what you are delivering:

• Hot food delivered to customers (standard-rated at 20%) — delivery charge is also standard-rated at 20%
• Cold food delivered to customers (zero-rated) — delivery charge is potentially zero-rated, but with important conditions
• Mixed basket (some hot, some cold) — the delivery charge treatment depends on the apportionment of what is delivered

The "follows the supply" principle is the default, but it is not absolute. The delivery charge is only zero-rated if the delivery is genuinely ancillary to the supply of zero-rated goods — it cannot be a standalone profit centre or a separately marketed service.

Cold food: when delivery is zero-rated

Cold takeaway food in the UK is generally zero-rated — this covers sandwiches, cold salads, cold drinks, and most groceries. If you are a business that delivers cold food exclusively (a cold meal-prep business, a salad delivery service, a cold-food subscription box), your delivery charge can be zero-rated alongside the food.

For a restaurant, the picture is more complex. If your delivery menu includes both hot and cold items — as most restaurant menus do — you will rarely have a clean zero-rated delivery charge. Most restaurant deliveries include at least some hot food, which pulls the delivery charge into standard-rated territory or into a mixed-rate situation.

Practical point: if you want to apply zero-rate to a delivery charge, the delivery genuinely needs to be of zero-rated goods. A cold side dish ordered with a hot main does not make the delivery zero-rated.

Platform commission: always standard-rated, regardless of food

This is where most restaurants get confused. While the delivery charge that the customer pays may have a nuanced VAT treatment, the commission that Deliveroo, Uber Eats, and Just Eat charge you is always standard-rated at 20%.

Platform commission is a service fee, not a supply of goods. The platforms charge VAT at 20% on their commission because they are providing you with a platform service — the food you sell is separate from the service they provide. The VAT treatment of your food does not affect the VAT treatment of their commission.

This is important because it means:

1. If you sell mainly zero-rated cold food, the platform's commission VAT is still charged at 20%
2. If you are VAT-registered, that 20% VAT on commission is generally reclaimable as input tax — but see the partial exemption note below
3. If you are not VAT-registered, you absorb the VAT on commission as a cost

For more on the reclaimability of commission VAT and how partial exemption applies, see our VAT on delivery commissions guide.

What the customer's delivery charge looks like

On most delivery platforms, the customer pays a delivery fee that is set or influenced by the platform rather than by the restaurant. For VAT purposes, there are two models in practice:

Platform-set delivery fee: The platform charges the customer a delivery fee on top of your food price. In this case, the delivery fee is the platform's fee (charged by the platform, collected by the platform), not yours. The VAT on that fee is the platform's concern, not yours. Your VAT exposure is on the food you supply, not on the platform's delivery fee. Restaurant-set delivery fee (own delivery): If you run your own delivery operation and charge a delivery fee through the platform or directly, the VAT on that delivery charge depends on what you are delivering — applying the "follows the supply" principle above.

For most restaurants using Deliveroo, Uber Eats, or Just Eat's standard courier model, the delivery fee is platform-set. Your VAT considerations are on your food sales and the platform's commission on those sales — not on the delivery fee itself.

The HMRC Digital Platform Reporting position

Since January 2024, Deliveroo, Uber Eats, and Just Eat report seller revenue to HMRC under the Digital Platform Reporting Rules (SI 2023/817). The figures reported are the gross amounts you were paid by the platform — your food revenue, not the delivery fees customers paid. Platform-side delivery fees are not attributed to you as seller income.

This means the VAT questions about delivery charges primarily apply to restaurants running their own delivery operations. For platform-courier restaurants, the practical VAT focus is on food VAT rates and commission VAT recovery — not on the delivery charge itself.

Partial exemption: when zero-rated food restricts commission VAT recovery

If a significant proportion of your menu is zero-rated cold food, the question of VAT recovery on commission becomes more technical. The general rule is that zero-rated supplies are taxable supplies, which means you retain full input VAT recovery on related costs — including commission. Partial exemption only restricts VAT recovery where you make genuinely exempt supplies (not zero-rated), which most restaurants do not.

However, where a business has a mixed menu of standard-rated and zero-rated items, there may be a partial-apportionment argument for commission VAT if HMRC considers only a portion of the commission to relate to standard-rated supplies. This is uncommon for typical restaurant operations but more relevant for specialist cold-food delivery businesses. Our VAT on delivery commissions guide covers the apportionment mechanics.

Making Tax Digital and delivery VAT records

For VAT-registered restaurants under Making Tax Digital, your digital VAT records need to capture the correct rate on each supply. If you have both standard-rated and zero-rated food items on your delivery menu, your accounting records should reflect the actual split — not apply a single blended rate.

The most practical approach for most restaurants is to record hot food sales as standard-rated and cold food sales as zero-rated, with the delivery charge following the predominant supply. For menus that are predominantly hot food, this means standard-rating the delivery charge. For more detail on MTD requirements for restaurant delivery operators, refer to HMRC's Making Tax Digital guidance directly, or consult your accountant.

Key takeaways

• Delivery charges generally follow the VAT rate of the supply — standard-rated goods = standard-rated delivery charge; zero-rated goods = potentially zero-rated delivery charge.
• Platform commission is always standard-rated at 20%, regardless of whether your food is hot or cold.
• For most restaurants on delivery platforms, the practical focus is on food VAT rates and reclaimable commission VAT — not the delivery charge itself, which the platform controls.
• Zero-rated food does not restrict commission VAT recovery — zero-rated is taxable (not exempt), so input tax on related costs remains recoverable.
• Platform delivery fees charged to customers are the platform's revenue; your VAT exposure is on your food sales.

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This guide covers VAT on delivery charges for UK restaurants and food delivery businesses and is for general guidance only. It is not tax advice. VAT treatment depends on your specific supplies, registration status, and business structure — consult a qualified accountant or HMRC's published guidance for your specific position.

Sources

• HMRC VAT Guide (Notice 700)
• HMRC — Catering, takeaway food and VAT (Notice 709/1)
• Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023