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Outside caterer: VAT repayments

VAT repayments may be made to VAT registered businesses if they pay out more in VAT on their purchases than they charge on their sales.

This might happen if, for example, you spent a lot on stock for your new catering business but didn't take much money in the early days of trading. You complete a VAT Return every quarter, setting the VAT you have had to pay against the VAT owed to HM Revenue & Customs (HMRC). If a repayment is due to you it will normally be paid direct into your business bank account a month or so after you have submitted the Return claiming it.

Catering provided under a contract for a function or event is always standard rated for VAT, but many of your basic food ingredients will be zero rated. So even if you're VAT registered, you won't be able to claim any VAT back on many of your food supplies.