Starlight,
LL didn't used to charge VAT but HMRC challenged this and LL lost! The decision of the courts was that LL provided a service (the counselling), not just food, and a provision of a service is taxable at the standard rate of VAT (unlike food which is generally exempt). The fact that you could just buy the packs and leave, without getting the 'service' was considered irrelevant. They also decided that you couldn't split the amount that related to the foodpacks and how much related to the counselling so we pay VAT on the whole lot!!
It's annoying as it's only 'luxury's foods that are normally taxed - and I think we'd all agree the foodpacks are hardly a luxury!
LL didn't used to charge VAT but HMRC challenged this and LL lost! The decision of the courts was that LL provided a service (the counselling), not just food, and a provision of a service is taxable at the standard rate of VAT (unlike food which is generally exempt). The fact that you could just buy the packs and leave, without getting the 'service' was considered irrelevant. They also decided that you couldn't split the amount that related to the foodpacks and how much related to the counselling so we pay VAT on the whole lot!!
It's annoying as it's only 'luxury's foods that are normally taxed - and I think we'd all agree the foodpacks are hardly a luxury!