The supply of food of a kind used for human consumption is zero-rated. Food includes drink. So sandwiches taken away from your premises are zero-rated. However, if food is prepared on the premises where it is to be eaten then the supply is regarded as being in the course of catering and is therefore standard-rated. The regulations are complex and very specific. There have been many disputes subject to a decision of the courts. For example, what if the sandwich shop is in an airport? Are the premises for this purpose the small seating area in the shop or the entire airport? Some customers will buy their sandwiches and find a seat elsewhere to eat them. A recent court case indicates that the answer is the small seating area only and not the entire airport. If you have any queries call the VAT Helpline on 0845 010 9000.
The ICAEW cannot accept any responsibility for the answers to the smallbusiness.co.uk website. By their nature the questions do not give sufficiently precise and full information to give a personal response. The response is general guidance including where the enquirer might find further and fuller information of relevance to the current enquiry.

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