Food - Zero Rating Flashcards
What is the significance of Innovative Bites [2022]?
IB won their case against HMRC arguing that large marshmallows, designed to be toasted with chocolate and sandwiched between biscuits (s’mores) were not confectionary and intended to be cooked before consumption
The tribunal put emphasis on the way the product was marketed and sold rather than the qualities of the product itself i.e. packaged for roasting and sold in BBQ section
What is the significance of the Innate Essence v HMRC [2023] case?
Turmeric shots were not a ordinarily consumed, they would not be ordered at a bar and they were marketed and reviewed on the basis of their health and wellbeing benefits
They were a food item and not a beverage, allowing for zero rating
Describe the case of Made to Order Ltd
A company operated three Subway franchised kiosks in shopping centres in Manchester.
All were adjacent to a seating area or food court where customers could sit to eat their food and many did.
HMRC ruled that food eaten in the seating area was supplied for consumption on the premises on which it was supplied and was therefore standard rated as catering.
The tribunal disagreed, the premises were the kiosks themselves rather than the food courts. The food courts were operated by the shopping centre not by the franchises.
Describe the case of Bagel Nash Ltd
The company sold cold takeaway food in the food court of York Designer Outlet. The company argued that the food court was not their premises.
The FTT examined the layout of the food court and decided that the facts were very different to Made to Order. A typical customer, unaware of the appellant’s lease, would most likely think of the seating as belonging to the outlet.
The premises was therefore deemed to be the food court (SR catering) and the appeal failed.
What is the significance of John Pimbett & Sons Ltd?
The court held that for the supplies of freshly baked pies were to be taxed as hot takeaway food, it had to be shown that the predominant subjective purpose of the seller in heating the food was to enable it to be consumed whilst it was still hot.
If the seller’s predominant purpose was to assure customers that it had been freshly baked, then the food was not standard-rated, even though some customers still consumed it whilst it was hot
What is the case of Pret A Manger (Europe) Ltd?
The tribunal rejected the argument that filled croissants were heated to keep them fresh and to prevent them from hardening.
It was found that the company’s predominant purpose in cooking the savoury croissants and presenting them for sale hot was so that they could be consumed above the ambient air temperature.
This was contrasted to The Great American Bagel Factory Ltd case where the tribunal accepted that the purpose of toasting bagels was to create a crunchy interior and promote freshness rather than enable them to be consumed hot.
What is the significance of the case of Innocent Ltd?
HMRC described a beverage as one you might commonly offer a guest and guests could be offered a smoothie
Smoothies were held to be a standard rated beverage and not food
What is the significance of the case of The Core (Swindon) Ltd?
The FTT and the UT considered that it was relevant to consider how the product was marketed, why it was consumed by the customer and the use to which it was put
Fruit and vegetable juices sold as meal supplements were ZR food.
What is the significance of the case Bioconcepts Ltd?
FTT considered a multi-factorial approach. This case concerned a product called Biolight which was marketed as detoxifying and slimming food to be taken by sipping throughout the day in small quantities diluted with water to help weightloss.
The tribunal accepted that Biolight contained enough nutritive value to be regarded as food, but it would not be consumed for pleasure. Drinkable liquid is not automatically a beverage.
The beverage test was established, it must be a drinkable fluid:
- characteristically taken to increase body fluids
- taken to slake thirst
- consumed to fortify
- or consumed to give pleasure
