We read the novel-length Morrisons rotisserie chicken judgment and all we feel is pain

FT Alphaville Wm Morrison Supermarkets PLCAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTWe read the novel-length Morrisons rotisserie chicken judgment and all we feel is painTax return to hot chickenWe read the novel-length Morrisons rotisserie chicken judgment and all we feel is pain on x (opens in a new window)We read the novel-length Morrisons rotisserie chicken judgment and all we feel is pain on facebook (opens in a new window)We read the novel-length Morrisons rotisserie chicken judgment and all we feel is pain on linkedin (opens in a new window)We read the novel-length Morrisons rotisserie chicken judgment and all we feel is pain on whatsapp (opens in a new window) Save We read the novel-length Morrisons rotisserie chicken judgment and all we feel is pain on x (opens in a new window)We read the novel-length Morrisons rotisserie chicken judgment and all we feel is pain on facebook (opens in a new window)We read the novel-length Morrisons rotisserie chicken judgment and all we feel is pain on linkedin (opens in a new window)We read the novel-length Morrisons rotisserie chicken judgment and all we feel is pain on whatsapp (opens in a new window) Save Louis AshworthPublishedDecember 16 2025Jump to comments sectionPrint this pageUnlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.“Unlike, say, apples, a customer cannot pick up an entire chicken and place it unpackaged in a shopping basket.” — PlatoMainFT reports:UK supermarket chain Morrisons faces a £17mn bill after it lost a long-running court battle to prevent value added tax being charged on its rotisserie chickens.The UK high court determined that the chickens should be subject to the standard VAT rate of 20 per cent for hot food.Given FT Alphaville’s extensive back-catalogue of VAT coverage, you may expect us to have a take on this. And yeah, we do. The judgment in this case — WM Morrison Supermarkets Ltd v Revenue and Customs (VAT - cool-down rotisserie chickens - whether “hot food”) — is 101 pages long. From citation to appendix, it’s more than 64,000 words.

Judge Mark Baldwin has more or less written a book in order to throw it at Morrisons. Pointlessly, here’s a cloud of the top 100 words, excluding common ones but including a bunch of headings:Some content could not load. Check your internet connection or browser settings.We already know the outcome: those chickens got taxed. So what else can we learn from this poultry saga?Morrisons sells some cool-down rotisserie chickensThe case covers a decision by HMRC — the UK’s taxman — that between January 2017 and July 2020, Morrisons incorrectly failed to levy value added tax on its “whole cool-down rotisserie chickens” (which, in line with the judgment and because it sounds like a financial instrument, we will henceforth call CDRCs). These are chickens that are cooked in-store, then placed in bags. In total, the amount of tax “in issue” was £17,034,392.Because of the length of the period coverage, the variety of rotisserie chickens sold (flavour and size), potential variations in prices by store and the possibility of sales, we cannot know the average cost of a chicken during this period. However, contemporaneous propaganda offers clues — for instance, in February 2019, Morrisons was, uh, crowing about a temporary discount on CDRCs from £5 to £4. We reckon £5’s a good rough figure to work with.Applying VAT to a £5 chicken at 20 per cent yields a neat £1 per chicken. Without wanting to insult anyone’s intelligence, that gets us to 17 million rotisserie chickens sold across the window.Dividing that across 43 months of 30.44 days each, that works out at about 12,987 CDRCs/day. We think you can only get CDRCs at Morrison’s larger stores, of which it had about 500 during this period. So that’s 25 per supermarket per day — probably more with discounting. We have no idea if that seems or is correct. It is important to note that CDRCs were not the only rotisserie chickens Morrisons sold during this period: there are also hot rotisserie chickens, and to highlight the possibility of variable non-compliance meaning the fine does not reflect total sales.This may make more sense soon. But we are keen to move beyond the judgment’s first paragraph.Hot food is hotAs MainFT explains:The case stems from changes brought in with George Osborne’s infamous “pasty tax” of 2012, when the Treasury sought to apply VAT to all hot takeaway food, such as pies, sausage rolls and pasties.In response to a public outcry, it rowed back on its initial proposal that food sold above “ambient temperature” should be taxable. Critics noted that the weather could determine if a product attracted VAT.The Treasury later decided that VAT would be applied to products stored in a hot cabinet, while those placed on a rack to be sold either cold or “incidentally hot” were exempt.Morrisons has argued that its rotisserie chickens should be exempt because most of its customers consumed the product cold or reheated it later in the day as part of an evening meal.With that in mind, the primary non-procedural question the First-Tier Tax Tribunal set out to rule on was this: are CDRCs “hot food”? It also had to answer a couple more: was it fit to rule in this instance? And did Morrisons have a “legitimate expectation” that the chickens should not be taxed based on previous HMRC communications?As judgment lays it out:To succeed before us, Morrisons needs the answer to question 1 to be “No” or, if the answer to question 1 is “Yes”, the answers to questions 2 and 3 also need to be “Yes”. Because we do not believe in unnecessary suspense, we say now that our answers to those questions (in order) are “Yes”, “Yes” and “No”.We’re not sure an aversion to suspense is compatible with a judgment that lands somewhere between Mrs Dalloway and The Color Purple in length, but nonetheless: the issue, in very brief, is this: if food is served to a customer hot “in the course of catering” it usually incurs VAT.To help frame this, we get a stone-hot VAT classic (legislation link):“Hot food” means food which (or any part of which) is hot at the time it is provided to the customerThere are some nuances: the food has to have been heated in order to be eaten hot (as opposed to, we suppose, for science), must be heated “to order”, must be kept hot (either actively or by slowing the cooling process), must be provided in packaging that keeps it hot and must be advertised as being hot.And what does “hot” mean, you ask? Above ambient temperature. here’s some chicken from a 2019 Morrisons post, just to rest your eyes upon Companies will find ways to not charge VAT if they canAs the length of this judgment — and its long-awaited arrival — indicate, this argument had been running for a long time. George Osborne’s 2012 tax reforms were a near-terms communications disaster — a key part of the “Omnishambles” budget — but have also cast a long shadow.The judgment quotes from a letter sent to Osborne that year by Dalton Philips, Morrisons’ then-chief executive:The fact that this has been called a pasty tax is misleading. It will also capture rotisserie chickens sold hot. Millions of people are buying rotisserie chickens for their evening meal every week……83% of our customers purchase them to consume later in the day when they’ve gone cold. We sell them hot because people want to know they have been freshly cooked, and we have to keep them hot for safety reasons.[The millions figure here looks like an mild exaggeration. A British Poultry Council report released around the same time found that trialling VAT on whole rotisserie chickens at a Morrisons reduced sales by 9 per cent. The BPC said that is such a drop were extrapolated, rotisserie chicken sales would fall by 73k a week — implying total sales of about 800k rotisserie chickens per week.]At the time, Morrisons sold rotisserie chickens in a single format, as “hot rotisserie chickens” (henceforth HRCs).Then-Treasury secretary David Gauke replied saying:The same rules will apply to other food, and I consider the taxation of hot rotisserie chickens is not an anomaly; it is right that rotisserie chickens which are kept hot or marketed as hot should be liable to VAT in the same way as other hot food.In the wake of these changes, Morrisons conducted consumer research, the practical outcome was that it began instead to sell rotisserie chickens in two ways: Cool-down rotisserie chickens (CDRCs)Hot rotisserie chickens (HRCs)Marketed as “oven fresh”Kept in heated cabinetsNot kept in a heated cabinetHad their temperatures checked regularlyStored in bags that did not effectively retain heatUnbagged until sold CDRCs, one witness told the court:were not displayed for sale for more than two hours after they were taken out of the oven. If they had not been sold by the end of that period, they were discarded as waste.Guidance provided to staff in 2013 added:VAT free chickens cannot be displayed from the hot countertop as this is deemed as keeping the product warm attracting VAT.As stated in Philips’ letter to Osborne, about four-fifths of Morrisons’ customers ate their rotisserie chickens later in the day. This ratio seemed to roughly translate to the CDRC vs HRC split, with the former making up 77 per cent of rotisserie chicken turnover across the period. However, about two-thirds of those shoppers were eating the CDRCs while they were still hot. MUCH TO CONSIDER.The crucial questions, eventually, were this: were CDRCs in effect only sold whilst hot? And were their bags keeping them warm? And did this mean they were hot? And the answer to all those is “yes” but let’s plough on a little anyway.This was a long-standing chicken beefAt this moment of rotisserie chicken bifurcation, Morrisons did or possibly didn’t engage with HMRC to discuss their idea. We can’t be totally sure because, as the judgment notes, the supermarket couldn’t find the any correspondence between their then senior finance manager for tax projects and an HMRC officer he may or may not have contacted.Eventually, the two sides got together and slowly figured out how to make this all work in terms of signage and the like. A whole bunch of things happened that take place over tens of thousands of words of the judgment, from which, with apologies to Virginia Woolf, we will now quote in a non-sequential and abridged collage in the style of To The Lighthouse. Click here to skip.Some content could not load. Check your internet connection or browser settings.OK that bit’s over……but the pain continues over dozens more pages, which dwell extensively on the potential heat retention qualities of various bag types and include extracts like:Clearly, the chicken paper bags perform several roles. Except possibly for the bags used in Scotland, the chicken paper bags are bright and cheerful with a Union Jack design and a large film window through which the chickens can be seen. In Scotland, the bags are dour, but they still have the large film window through which the chickens can be seen.And:Unless Mr Gauke was drawing a sophisticated distinction between packaging “specifically designed” for heat retention and packaging “primarily designed” for that purpose, so that packaging could be specifically designed for heat retention without being primarily designed for that purpose (which is clearly a linguistic possibility, albeit one we find hard to come to terms with), it is hard to square his comments with the words of the provision.And:The question asked is whether the chicken paper bags were “specifically designed” for hot food. “Specifically” is defined in the Oxford English Dictionary as meaning, among other things, “particularly; with a particular or clearly defined purpose, meaning etc”. Whilst “specifically” requires a particular purpose, it does not carry any connotation of exclusivity.And:Displaying a CDRC near a toblerone [triangular display case, named after but not a Toblerone] or poster with a picture of a cooked chicken does not mean that the CDRC is being marketed as being hot. Particularly so when the picture is of rotisserie chickens glistening on a spit or a little girl eating a chicken with salad and potatoes.The, uh, conclusion seems to be a hot chicken in a bag stays hot longer than a chicken not in a bag. This is just over halfway through the judgment. FT Alphaville could literally feel its brain hurting after hitting a third? fourth? dozenth? paragraph about the bags’ juice-retaining properties.babe you’re being so quiet, what are you thinking about? After 61 pages, the decision is in: those chickens were hot enough to tax. The question over how unbagged cooked chickens would be taxed is only briefly addressed, though we suppose it is somewhat moot. As noted at one point:Unlike, say, apples, a customer cannot pick up an entire chicken and place it unpackaged in a shopping basket. There are several reasons for this such as its unwieldiness, size and texture as well as the risk of cross contaminationOnward!Legal history is boring…Pages 62–87 are largely concerned with whether the FTT had the right to pass a judgment in this case. We came for chicken, not jurisprudence, and our eyes were starting to hurt. SKIP.…as is regular historyTo round out the final salient question — whether HMRC may have misled Morrisons about how it could or couldn’t sell chickens — the final section of the judgment (by which we mean the last dozen pages) dives into the mother of all tick-tocks (the journalism one, not the one with the dances and the surveillance). Much of the judgment’s closing section centres on whether Morrisons had been officially told that the CDRC arrangement was fine: the judge concludes they never were, and when HMRC launched a review of the arrangement in 2017, it was bad news for hot chickens.The tribunal rapped Morrisons on the knuckles for its failure to disclose:the heat and grease/fluid retention features of the chicken paper bags and the fact that CDRCs were taken off sale after two hours, whilst they were still well above the ambient temperature and were not on a cooling trajectory that meant that they would only be “incidentally hot” when sold.EpilogueWhat can we learn from this? Unless you’re a rotisserie chicken retailer, likely nothing.We want our afternoon back. You probably do too.Further reading:— When’s a flapjack not a flapjack? It’s a maddeningly difficult questionReuse this content (opens in new window) CommentsJump to comments sectionPromoted Content Follow the topics in this article Retail & Consumer industry Add to myFT Food & Drink Add to myFT UK tax Add to myFT HM Revenue & Customs Add to myFT Wm Morrison Supermarkets PLC Add to myFT Comments