Been down this road a few times now....
FP is not VAT registered so we pay VAT on purchases and dont charge VAT on sales.
For commercial brewing ingredients, most are zero rated so VAT is not on the invoice from the supplier, or it's a zero value line.
For obvious homebrewing products, the standard VAT rating applies to
- kits for home brewing, wine making etc;
- retail packs of hopped malt extract, malted barley, roasted barley, hops, special wine and brewer’s yeasts, wine or beer concentrates and similar products specialised to home-brewing or wine making; and
- retail packs of foods which are not specialised to home-brewing or wine-making, such as fresh, dried or tinned fruit and fruit juices, barley, glucose and plain malt extract, if they are held out for sale (ie packaged and labelled) for home brewing or wine making.
So... I often see the argument that if it's in a sack, in bulk, it should be zero rated.
There might be some interpretation, but I think it's clear that if a business sells malt that is offered as a homebrew product then it doesn't matter how it's packed, it's standard rated :
VAT notice 701/14
3.7.4 Ingredients for home beer and wine making
Products that are canned, bottled, packaged or prepared for use in home wine or beer making are standard-rated. This includes:
- kits for home brewing, wine making and so on
- retail packs of hopped malt extract, malted barley, roasted barley, hops
- special wine and brewers’ yeasts
- grape concentrates
- retail packs of foods, which are specialised to home wine making, such as dried elderberries or sloes for making country wines
You must also standard rate any general food product that you hold out for sale specifically for home wine making or brewing, such as fresh, dried or canned fruit, fruit juices and concentrates, barley, glucose and plant malt extract. In this context, you hold them out for sale for home brewing and wine making if you:
- sell them through a retail outlet that specialises in home brewing and wine making materials
- sell them in the home brewing and wine making department or section of a general outlet
- label, advertise or otherwise display them as materials for home brewing or wine making, or provide with them or on their packaging any brewing or wine making recipes, or instructions for using them in the making of beer or wine (for example, the amount of sugar required for their fermentation or the type of yeast to be used)