VFOOD2840 | Items benefiting from the relief: what is food?: food packaging: the linked goods concession

Food and its associated packaging may be treated under the linked goods concession described in Notice 700/7, Business Promotion Schemes. This means that if packaging is more than normal and necessary, it may nevertheless be treated as zero-rated if it:

• is not charged at a separate price; and

• costs the supplier no more than 20% of the total cost of the combined supply and is worth no more than:

1. £1 (excluding VAT) if included with goods intended for retail sale; or

2. £5 (excluding VAT) otherwise.

The linked goods concession generally allows small items included with packaging, such as plastic spoons supplied with yoghurt, to be treated as a single supply with the food. For packaging which appears more extensive than the basic examples given in this section, however, the value criteria in the concession are usually exceeded: so when examining such packaging you must consider whether it can be accepted as normal and necessary for the product concerned.