How to make your food shop VAT free

Kara Gammell
Finances expert
2
minute read
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Posted 6 October 2021

If you're feeling like your money doesn’t go as far as it used to, you aren’t imagining it. 

Rising energy bills, price increases at the pumps and the end of the £20 universal credit uplift means that many households are struggling to make ends meet. 

Fortunately for the shopping-savvy, there is one easy way to cut costs at the supermarket - choose foods that are VAT free. 

What's VAT? 

Value added tax, or VAT, is the tax you have to pay when you buy goods or services. 

When you see a price for something in a shop, any VAT will already have been added. 

The standard rate of VAT in the UK is 20%, with about half the items households spend money on subject to this rate. 

There is a reduced rate of 5% which applies to some things like children's car seats and home energy. 

There are also various items for which you do not have to pay any VAT, such as most supermarket food, children's clothing, newspapers and magazines.  

Avoid VAT and buy Skips and Twiglets instead of Monster Munch and Wotsits 

Shop savvier to save 

If you know what is and is not subject to VAT, then you'll be able to adjust your shopping to save. 

VAT law is supposed to split your supermarket shop between two categories; luxury foods that will be subject to a 20% tax and essential foods that are exempt. 

But because of the difficulty of deciding what counts as a luxury item, it's possible to buy very similar products at 20% less than others because they are VAT-free. 

For instance, buying tortilla chips and wheat-based snacks such as Monster Munch and Wotsits instead of potato crisps will avoid VAT. 

When buying gingerbread men, check how much chocolate they have on them – any more than a few dots for the eyes and you will be paying VAT. 

Perhaps the most important thing to remember concerns nuts and dried fruit. 

If you buy them in the baking aisle, you're probably not paying any tax, but if you buy them from the snack aisle, you'll be paying the full 20pc VAT. 

Given that you're probably paying a mark-up for packaging anyway, it makes sense to buy them in bigger bags. 

Here is a handy list of how you can make a savings. Why not download it and print for next time you head to the supermarket? 

What’s your top tip for cutting VAT on your food shopping?

Products where VAT is payable Vat Free Alternatives
McVitie’s Milk Chocolate Digestives Maryland Chocolate Chip Cookies
Gingerbread man decorated with chocolate Gingerbread men with a few dots of chocolate for eyes
Arctic Rolls Cream Gateaux
Sorbet Mousse
Nuts for snacking Nuts for baking
Nuts or fruits covered in chocolate or yogurt Toffee apples
Flavourings for milkshake Milkshake
Sensations Thai Sweet Chilli Crisps Doritos Chilli Heatwave
Roasted or salted nuts without shells Roasted or salted nuts supplied in shells (monkey nuts, pistachios)
Walker's Milk Chocolate Coated Shortbread Fingers Millionaires Shortbread (with caramel layer)
Crystallised ginger Ginger in syrup
Sun Maid Raisins Raisins packaged for baking
ProperCorn Butterkist Microwave Popcorn
Prawn crackers made from cereals Prawn crackers made from tapioca
KP Original Salted Peanuts Roasted or salted nuts still in shells or packaged for home baking
Monster Munch and Wotsits Skips and Twiglets

 

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Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.