In this month’s VAT updates, Graham Elliott, explains the latest policy clarification on zero rating for foods, mixed messages over supply of electricity at charging points for electric cars and Poundland win over retail scheme dispute
Liquid meals: zero rating question
HMRC has issued R&C Brief 6 (2021) concerning its policy in respect of the zero rate for foods, and how this interfaces with the standard rate exception for ‘beverages’. It is notable that defining ‘beverage’ has been a preoccupation with product manufacturers, only rivalled by debates around ‘cake’ and ‘confectionery’ for the most arcane distinction in VAT.
The Brief arises from the case of The Core (Swindon) in which the Upper Tribunal decided (but on a different basis to the First Tier Tribunal) that a ‘juice cleanse programme’ was zero rated, as it amounted to meal replacement, where the juicy liquid fruit fulfilled the dietary purpose of a normal meal, and thus transcended the typical definitions of ‘beverages’ set in the old case of Bioconcepts.
HMRC
