TC09095 - [2024] UKFTT 00181 (TC)

Fecha: 05-Dic-2023

Introduction

Introduction

This appeal concerns the VAT treatment of bars made from fruit and nuts; fruit, oats and nuts; and oats and fruit (‘the Products’) which are listed in an annex to this decision. The Products are manufactured by Organix Brands Limited (‘Organix’) and Natural Balance Foods Limited (‘Nakd’) and sold by the Appellant (‘Morrisons’) in its stores. Although there are 20 varieties, the Products may be grouped into four categories, namely:

(1)

Fruit and nut bars - Nakd Berry Delight Wholefood Bar, Nakd Berry Cheeky Wholefood Bar, Nakd Berry Bliss Breakfast Bar, Nakd Peanut Delight Wholefood Bar and Organix Banana Soft Oaty Bar;

(2)

Bars that emulate desserts, biscuits or cakes - Nakd Blueberry Muffin Wholefood Bar, Nakd Cashew Cookie Wholefood Bar, Nakd Bakewell Tart Wholefood Bar, Nakd Lemon Drizzle Wholefood Bar, Nakd Gingerbread Wholefood Bar, Nakd Apple Pie Wholefood Bar, Nakd Banana Bread Breakfast Bar and Organix Carrot Cake Soft Oaty Bar;

(3)

Crunch bars - Nakd Banana Crunch Wholefood Bar and Nakd Strawberry Crunch Wholefood Bar; and

(4)

Bars that emulate sweets or chocolate products – Nakd Rhubarb & Custard Wholefood Bar, Nakd Cocoa Orange Wholefood Bar, Nakd Cocoa Delight Wholefood Bar, Nakd Cocoa Twist Breakfast Bar and Nakd Cocoa Loco Wholefood Bar.

The only issue in the appeal is whether the Products are ‘confectionery’ within item 2 of the excepted items in Group 1 of Schedule 8 to the Value Added Tax Act 1994 (‘VATA’) and thus chargeable to VAT at the standard rate. It is common ground that if the Products are not confectionery, they are zero rated for VAT purposes under general item 1 in Group 1 of Schedule 8 as “Food of a kind used for human consumption”.

At the hearing, Ms Sloane KC appeared for Morrisons, and the Respondents (‘HMRC’) were represented by Mr Watkinson. We are grateful to both counsel for their assistance.

For the reasons set out below, we have decided that the Products are ‘confectionery’ for the purposes of VAT and, accordingly, Morrisons’ appeal is dismissed.