There is a strong case for simplifying the law on VAT on food, writes David Walters (Deloitte).
The tribunal’s decision in Pulsin’ Ltd v HMRC [2018] UKFTT 775 has all the hallmarks of a classic VAT food liability case. It concerns a straightforward question about whether ‘Raw Choc Brownies’ were cakes or confectionery. It involved a tasting session in which tax lawyers sat down to sample the product alongside similar products. It considered a large number of different factors (such as manufacturing methods ingredients taste and appearance marketing and packaging) which ultimately boiled down to an ‘informed impression’ that the brownies were cakes and therefore qualified for zero-rating. In short it involved a largely subjective test where opinions are easy to form but difficult to prove. The decision attracted widespread coverage in the national press.
Food liability decisions
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There is a strong case for simplifying the law on VAT on food, writes David Walters (Deloitte).
The tribunal’s decision in Pulsin’ Ltd v HMRC [2018] UKFTT 775 has all the hallmarks of a classic VAT food liability case. It concerns a straightforward question about whether ‘Raw Choc Brownies’ were cakes or confectionery. It involved a tasting session in which tax lawyers sat down to sample the product alongside similar products. It considered a large number of different factors (such as manufacturing methods ingredients taste and appearance marketing and packaging) which ultimately boiled down to an ‘informed impression’ that the brownies were cakes and therefore qualified for zero-rating. In short it involved a largely subjective test where opinions are easy to form but difficult to prove. The decision attracted widespread coverage in the national press.
Food liability decisions
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