When Is Food Not Food?
Why VAT Makes Snacks, Drinks, and Smart Fridges More Complicated Than You’d Think
At H2O Vend, we make it easy to grab something tasty — whether it’s from one of our vending machines, a Grab&Go Chilled smart fridge, or a Grab&Go Frozen freezer.
But if you’ve ever noticed that some drinks or snacks cost a few pence more than others, even when they seem similar, you’ve met the UK’s most mysterious ingredient: VAT.
In the world of HMRC, food isn’t always food. Some things are “food”, some are “confectionery”, some are “beverages”, and some are “food-like but not quite food”. It’s a minefield of definitions that even tax professionals struggle to explain without a strong coffee (standard-rated, naturally).
So let’s demystify it. Here’s a simple, light-hearted look at when food stops being food — and how that affects what you buy from our machines.
“The Great VAT Showdown!”
Snacks and the great confectionery conundrum
Let’s start with the easy bit: snacks.
If you pick up crisps, chocolate, sweets, or most snack bars, these are considered confectionery or savoury snacks, and they carry 20% VAT.
Cakes and some plain biscuits are usually zero-rated, but the moment they’re sweetened, coated in chocolate, or packaged as a snack, they get hit with the standard rate.
So when your favourite flapjack costs slightly more than your salad, it’s not because we like salads more — it’s because the tax office does.
Grab&Go Chilled — cold food done right
Our Grab&Go Chilled smart fridges can be stocked with sandwiches, wraps, yoghurts, and salads — all kept perfectly fresh for busy workplaces.
The good news? When you buy these items cold and to take away, they’re usually zero-rated for VAT.
That means the price you see is just for the food itself — no added tax. It’s one of the few areas where the rules are actually sensible.
But as always, there’s a twist: if a product were ever served hot or as part of a “catering” service, VAT would apply. Luckily, we don’t do hot food vending, so your Grab&Go Chilled items stay on the straightforward side of the rules.
Grab&Go Frozen — food for later
The same logic applies to our Grab&Go Frozen range. These freezers are designed for convenient, high-quality meals that you heat after purchase.
When sold frozen or chilled for reheating later, these foods are generally zero-rated for VAT.
The only exceptions are classic desserts like ice cream or frozen yoghurt, which HMRC treats as a luxury and therefore applies standard rates.
So if your frozen lasagne is VAT-free but your ice cream isn’t, that’s not us being inconsistent — that’s just the way the cookie (also standard-rated) crumbles.
Hot drinks — and the rule that’s actually simple
If you’re getting your caffeine fix from one of our coffee machines, every cup of hot coffee, tea, or hot chocolate is standard-rated at 20%. (If, however, you buy the Beans or ingredients from us to use at home, or in a freevend machine, they are zero-rated!)
Hot = standard-rated.
Simple, for once (ish…)
Cold drinks — where the real confusion begins
Cold drinks are where the VAT story gets properly weird. Most people assume cold = cheaper, but the rules depend on what’s inside the bottle or can.
Here’s the rundown in plain English:
Still bottled water – Standard-rated at 20%. It might be the purest drink on earth, but HMRC still counts it as a luxury “soft drink”.
Sparkling water or fizzy drinks – Standard-rated. Add bubbles, sugar, or flavour, and the taxman gets interested.
Flavoured waters and energy drinks – Also standard-rated. Anything sweetened or carbonated falls into the same category.
Fruit juices and smoothies – Surprisingly, these are standard-rated too. Even if they’re 100% natural, they’re considered beverages, not “food”.
Plain milk – Zero-rated. One of the few drinks HMRC still considers a basic foodstuff.
Milkshakes and flavoured milk drinks – Zero-rated when sold cold to take away. Despite being sweet, they’re still classed as milk-based foods.
Iced coffee and iced tea – Zero-rated when sold cold to take away. Unlike their “damn, I forgot to drink it” hot counterparts...
So yes — bottled water is taxed, but iced coffee isn’t. If that sounds upside-down, you’re starting to understand VAT.
Supplements, protein bars, and “functional” drinks
If you grab a protein bar, energy shot, or performance drink, those usually fall under standard-rated VAT.
Even though they’re edible (or drinkable), HMRC doesn’t class them as food — they’re “dietary supplements” or “specialist products”.
So that post-gym protein shake isn’t more expensive because we’re being mean — it’s just on the government’s luxury list.
Why it all matters
You might not care what VAT rate your lunch falls into — and honestly, we wouldn’t blame you — but it explains why prices sometimes vary between similar-looking products.
We make sure every single product in our machines, fridges and freezers is coded correctly, so you’re always paying the right price with the correct VAT included.
We don’t make the rules (and frankly, we wouldn’t want to), but we do make sure to follow them, so you never pay more than you should.
Real-world examples
To put all that into context:
A bottle of still water has VAT included.
A bottle of milk doesn’t.
A can of cola includes VAT.
A can of iced latte doesn’t.
A sandwich is usually VAT-free.
A chocolate bar isn’t.
If you can explain that logic at a dinner party, you’ve officially qualified as a VAT professional.
Our promise to you
At H2O Vend, we take the complexity out of convenience. Our Grab&Go Chilled and Grab&Go Frozen systems, along with our smart vending and coffee solutions, are all programmed to handle VAT correctly and transparently.
That means:
Prices shown are always accurate.
You’re never overcharged for tax.
You get total clarity on what you’re paying for.
Whether it’s a chilled drink, a fresh lunch, or a frozen meal for later, you can enjoy it knowing we’ve handled the boring bits behind the scenes.
The bottom line - Food is not food when..
..It’s fizzy, fortified, or falls under one of HMRC’s many “special circumstances”.
But whatever you grab — from a sandwich in Grab&Go Chilled to a bottle of milkshake in our vending range — you can be sure of two things:
It’s fresh, convenient and responsibly sourced.
The price includes exactly the right amount of VAT, no surprises.
So go on — grab, go, and enjoy.
We’ll handle the tax headache for you.
H2O Vend — keeping workplaces refreshed, one smart fridge at a time.
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