Is coffee zero-rated for VAT in the UK?

Coffee beans, ground coffee and green coffee are zero-rated as food. Hot coffee drinks and coffee consumed on premises are standard-rated.

Do coffee roasters have to register for VAT?

Only when taxable turnover passes the threshold (£90,000 from 1 April 2024). Zero-rated sales count towards it. Many roasters register voluntarily to reclaim VAT on costs.

Is VAT charged on coffee sold to cafes?

Wholesale roasted coffee is zero-rated. The cafe then charges VAT on the drinks it serves.

VAT on coffee: beans, drinks, equipment and gift packs

Coffee beans are zero-rated in the UK; the same coffee served as a hot drink is standard-rated. Where the line falls for roasters, cafes, gift packs and equipment, and what it means for registration.

7 min read Updated October 9, 2026

Most food is zero-rated for VAT in the UK, with exceptions listed by law, and some items that 'override' the exceptions and return to zero. HMRC's VAT Notice 701/14 explains the rules. Coffee sits on the zero-rated side, while catering and hot food and drink are standard-rated.

The main lines for a roastery

Supply	Usual VAT rate	Why
Roasted coffee beans and ground coffee	Zero	Coffee and its preparations override the beverages exception and are zero-rated food
Green coffee	Zero	As above
Coffee sold to cafes (wholesale)	Zero	The same goods; the buyer's use does not change it
Hot coffee drinks to take away	Standard	Hot food and drink is standard-rated
Drinks or food consumed on your premises	Standard	Supplies in the course of catering are standard-rated
Grinders, brewers, mugs, merchandise	Standard	Not food
Training courses and equipment servicing	Standard	Services, not food

Cold drinks, coffee-based ready-to-drink products and mixed gift packs (coffee with a mug or brewer) have their own rules. HMRC's notice covers mixed and multiple supplies and promotional items; check it, or ask an adviser, for any product that combines coffee with something else.

Registration

You must register for VAT when your taxable turnover in the last 12 months goes over the registration threshold, or you expect it to in the next 30 days alone. The threshold is £90,000 from 1 April 2024. Taxable turnover includes zero-rated sales, so a roastery selling only zero-rated coffee still counts its sales towards the threshold. HMRC can allow a business that makes mainly zero-rated supplies to apply for an exception from registration; ask whether it suits you.

Why registering can help a roastery

A business that sells mostly zero-rated coffee charges no VAT on those sales but can reclaim VAT on its costs: the roaster, packaging, equipment, fuel and services. That often means regular VAT repayments. Weigh this against the admin, and against any standard-rated sales such as drinks and merchandise.

Practical points

VAT housekeeping

Set the right VAT rate on every product in your shop and invoicing system
Show VAT-inclusive prices to consumers if you are registered
Separate zero-rated and standard-rated lines on mixed invoices
Keep digital records and file under Making Tax Digital once registered
Check the treatment of any new product type with Notice 701/14 before launch

Where Roastnet helps

Questions roasters ask

Is coffee zero-rated for VAT in the UK?: Coffee beans, ground coffee and green coffee are zero-rated as food. Hot coffee drinks and coffee consumed on premises are standard-rated.
Do coffee roasters have to register for VAT?: Only when taxable turnover passes the threshold (£90,000 from 1 April 2024). Zero-rated sales count towards it. Many roasters register voluntarily to reclaim VAT on costs.
Is VAT charged on coffee sold to cafes?: Wholesale roasted coffee is zero-rated. The cafe then charges VAT on the drinks it serves.

Official sources

Rules change. These sources were checked on October 9, 2026; always confirm the current position with the body that publishes them before you act.