TC09646 - [2025] UKFTT 01123 (TC)

This appeal concerns assessments issued to Telamara Limited (Appellant) by HM Revenue & Customs (HMRC) pursuant to section 73 Value Added Taxes Act 1994 (VATA) on 9 February 2022 (Assessments). The Assessments seek to recover output tax HMRC contend to have been under declared for VAT prescribed accounting periods 02/20 to 05/21 in connection with the supply of nitrous oxide (N2O) for culinary use; in particular, and as HMRC understood it, 8g canisters for use exclusively as cream chargers (Chargers)which HMRC consider should properly have been standard rated but had been treated as zero rated by the Appellant. The total sum assessed (following review) is £1,477,581.86.

Prior to the hearing, the Appellant’s challenge to the Assessments was not entirely clear. By its correspondence, the grounds of appeal and Mr Parr’s witness statement the focus of the Appellant’s discontent with the Assessments was that he felt they were unfairly raised. This was because when the business was established the Appellant had been unclear as to the liability to be applied to supplies of the Chargers. HMRC had been contacted on two separate occasions and on each had referred the Appellant to public guidance on the liability of food products and had otherwise been unable to assist the Appellant with determining the liability of the Chargers. Mr Parr asserted that HMRC had allowed the Appellant to mis-declare the VAT only subsequently to then seek to recover it. Mr Parr challenged how HMRC could have been so uncertain when he asked them when he went into business supplying the Chargers and yet now so certain that the supplies were standard rated.

As we explained to Mr Parr, our jurisdiction is limited to determining the liability of the Chargers by reference to the evidence available to us and applying the provisions of Item 1 Group 1 Schedule 8 VATA (Item 1)as considered and explained in the case law. We do not therefore recite or address any of Mr Parr’s submissions as to fairness. However, we note that Mr Parr accepted that HMRC never told him the Chargers were properly zero rated.

Mr Parr does not challenge the calculation or quantum of the Assessments if the Chargers should properly be standard rated.

For the reasons set out below we find that the Chargers are standard rated, and we dismiss the appeal.