On December 17, 2025, the UK supermarket giant Morrisons was ordered to pay a £17 million tax bill after losing a protracted legal battle over the value-added tax (VAT) applied to its popular rotisserie chickens. The ruling, handed down by a first tier tribunal and later affirmed by the High Court, marks the conclusion of a dispute that has simmered for over a decade and touches on broader questions of tax fairness, economic hardship, and the complexity of Britain’s tax code.
The origins of this case trace back to 2012, when then-Chancellor George Osborne introduced the so-called “pasty tax.” This measure was designed to clarify the VAT treatment of hot baked goods, stipulating that food sold above “ambient temperature” would be subject to the standard 20% VAT rate. The move was met with a public outcry—critics accused ministers of targeting working-class staples, and the government eventually staged a partial climbdown, exempting products that are allowed to cool to room temperature before sale.
Morrisons, headquartered in Bradford, found itself at the center of this debate. The supermarket chain argued that its whole cooked chickens should be exempt from VAT, citing research indicating that 80% of its customers either ate the chickens cold or reheated them later. Richard Nichols, Morrisons’ finance director, defended the company’s stance in court, stating, “Morrisons operates in a highly competitive industry sector with low profit margins,” and emphasizing that “this product is typically purchased by households on lower incomes with two-thirds of customers believing £4.50 was the most they would pay.” At the time of the court hearing, Morrisons’ rotisserie chickens retailed for £4.40, but the imposition of VAT would push the price closer to £5.28—a significant jump for budget-conscious shoppers.
Despite these arguments, the tribunal found against Morrisons. Judge Mark Baldwin’s ruling was unequivocal: “Morrisons failed to disclose the heat and grease/fluid retention features of the chicken paper bags and the fact that (cool-down rotisserie chickens) 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.” The court cited evidence that the chickens were sold in foil-lined bags labeled “caution: hot product,” and that any chickens not sold within two hours were discarded. These factors, the judge concluded, meant that the chickens were not exempt from VAT under the Treasury’s guidelines.
According to BBC, the tribunal found that HM Revenue & Customs (HMRC) had not ruled the chickens to be zero-rated for VAT, and Morrisons had failed to report key facts about the special packaging used to retain heat. This packaging, designed to keep the chickens warm and juicy, ultimately counted against the supermarket’s case. The ruling stated: “The firm had also failed to report the fact that (cool-down rotisserie chickens) 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.”
This legal saga underscores the complexity of the UK’s VAT rules, particularly when it comes to food. The “pasty tax” itself was controversial from the outset, with critics accusing the government of waging class warfare against those who rely on affordable, ready-to-eat meals. The Treasury’s initial approach was to tax all hot takeaway food, but after public backlash, exemptions were introduced for products sold cold or “incidentally hot”—a phrase that would become central to Morrisons’ defense. Yet, as the court found, the supermarket’s rotisserie chickens did not meet these criteria due to their packaging and the way they were handled in-store.
The broader economic context is hard to ignore. The ruling comes at a time when UK households are grappling with a cost of living crisis, stagnant wages, and inflation that remains stubbornly above target. Supermarkets like Morrisons are already facing higher National Insurance charges, increases in the living wage, and looming hikes in business rates. As one commentator put it, “The last thing the UK needs right now is what amounts to a stealth tax on spit-roasted poultry.” While £17 million may be a drop in the ocean for the Treasury, for shoppers and supermarkets alike, every penny counts.
The case also highlights the fine line between tax avoidance and compliance. Morrisons maintained that it had worked with HMRC in good faith, with its tax and treasury division engaging voluntarily with the authorities. Yet, the court found that the company’s failure to fully disclose the heat retention features of its packaging and the timing of chicken sales undermined its argument. The judge noted, “HMRC did not give clear and unambiguous rulings in 2012-14 that cool-down rotisserie chickens were zero-rated, which Morrisons had a legitimate expectation it could rely on.”
For now, it remains unclear whether Morrisons will pass the cost of the VAT onto consumers by raising the price of its rotisserie chickens. The supermarket declined to comment on the ruling, leaving shoppers and industry observers to speculate about the potential impact. What is clear is that the decision sets a precedent for how similar cases might be handled in the future, with implications for other retailers who sell hot food intended for home consumption.
The Morrisons rotisserie chicken case may seem, at first glance, like a minor skirmish in the grand scheme of British tax policy. But it is emblematic of larger debates about fairness, transparency, and the burdens placed on both businesses and consumers. As the dust settles, tax lawyers and industry insiders will no doubt pore over the judgment’s small print for months to come, searching for lessons and loopholes. For now, though, it appears that the Treasury’s appetite for VAT on hot food remains undiminished—and Morrisons, along with its customers, will have to swallow the cost.
With the ruling now final, the supermarket faces a significant financial hit, and British shoppers may soon be paying more for their Friday night chicken dinners. Whether this outcome strikes the right balance between fiscal necessity and everyday fairness is a question that will continue to simmer, long after the last rotisserie bird has left the shelf.
