TC09646 - [2025] UKFTT 01123 (TC)

HMRC contend, by reference to the Court of Appeal judgment in HMCE v Ferrero UK Limited [1997] STC 881 (Ferrero) that we have an uncomplicated task: we must determine whether the N2O contained in the Charger is accurately described as “food of a kind used for human consumption”. As confirmed in HMRC v Procter & Gamble UK Limited [2009] EWCA Civ 407 (P&G) that question is not “one calling for or justifying over-elaborate … legal analysis. It is a short practical question calling for a short practical answer.” They say that the relevant perspective from which it is appropriate to answer that question is that of the ordinary person in the street who has been informed about the product and the surrounding circumstances.

Drawing from an extensive and thorough review of the very many cases which have considered the scope of the food zero rate Ms Arhestey contended that we should undertake a multifactorial exercise considering and weighing up the following factors to answer the relevant question from the relevant perspective:

Fairly, we were taken to each of 20 first instance decisions in which products including, edible flowers, algae derivatives, herbal teas, bread starters, bicarbonate of soda, linseed oil and carbon dioxide have been considered and assessed to determine whether they are food of a kind used for human consumption. In doing so she recognised her professional duty to ensure that as the Appellant was unrepresented our attention should be drawn to matters both in support of her contentions and those against.

HMRC assessed each of the factors identified in paragraph 46 above. In the main Ms Arhestey considered the factors to be either neutral or supporting a conclusion that the N2O was not food of a kind used for human consumption. Drawing the threads of all of the cases together HMRC contended that the case most analogous to the present situation was Gas & Chemicals Ltd v HMRC (decision number 18160) (G&CL)concerning carbon dioxide /nitrogen.