Morrisons has incurred a £17m bill after losing a court filing against HMRC to end VAT being charged on its rotisserie chickens.

Following a 13-year court battle, the UK High Court ruled that the whole cooked chicken sold at the retailer should be subject to a 20% VAT rate for hot food.

The battle comes from changes which were introduced by former chancellor George Osborne’s “pasty tax” of 2012, with the Treasury imposing VAT on all hot takeaway food from supermarkets and bakeries.

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This was changed from the original proposal to state that food which was on sale above “ambient temperature” would face the tax charges.

The policy stated that food products which were placed on a rack or to be sold as cold or “incidentally hot” were excluded from the tax.

The Morrisons stated that the rotisserie chickens should be exempt from the tax due to the food product either being eaten cold or reheated.

However, the ruling concluded that the chickens would be “above ambient temperature” two hours after being removed from the hot cabinets.

The judge decided that the chickens should be subject to VAT due to them being beyond “incidentally hot” when sold to customers.

Morrisons has been contacted for a comment.