Chilango’s VAT battle with HMRC
The Mexican restaurant, Chilango, has five sites in London and a further two outside. Upon deciding that its takeaway sales between December 2008 and March 2012 should have been zero-rated, it claimed a £681,623 refund from HRMC.
HMRC assessed that the chain owed £59,328 in VAT for June 2012, as well as £28,416 for the September 2012 period.
Chilango put a case forward that it should not be liable for VAT based on the overall temperature of the product. The salad, salsa, cheese and other sauces were cold, upon which Chilango felt no VAT applied. However, many of its products which, included meat fillings, were heated.
Chilango were unable to show that the products (containing all or some of meat, rice, beans and fajitas) were not heated to be consumed. Therefore, its appeal was dismissed.
There have been a number of food-related VAT cases, such as Jaffa Cakes, and more recently a VAT on frozen fruit was disputed.
To ensure the correct VAT is applied please contact us for further advice.
