In all cultures, plants are traditionally accredited with real or imagined medicinal properties; and there has always been an overlap between medicinal teas and traditional herbal teas. For example, camomile tea, which is nowadays largely drunk for pleasure as an alternative to normal tea, is described in A Modern Herbal (by Mrs M Grieve) as tonic, stomachic,anodyne and antispasmodic.
There is a specific relief for
herbal teas in
item 4 of the
items overriding the exceptionsVFOOD0200). Nevertheless, there is
often confusion as to how these preparations should be treated for
VAT purposes.
The main point to remember is that the
items overriding the exceptions relate
to items which would otherwise fall within the exceptions.
Therefore, to be zero-rated as a herbal tea, a product must first
be food and then also be a beverage.
In the case of
Dr Xu Hua (LON/95/2069), a practitioner
of traditional Chinese herbal medicine, the tribunal found that the
teas supplied on prescription were eligible for zero-rating even
though they were for a medical or therapeutic purpose. They were
made up of ingredients found in commercial brands of herbal teas,
had some nutritive value and were drunk as part of a
patient’s normal daily diet. That they were supplied for a
medicinal purpose should not prevent the teas being treated with
the same liability as the pre-packaged teas.
Following this decision, supplies of herbal teas, even when
they are prescribed for a medical reason, have been accepted as
zero-rated.
A consultation with a patient/customer is still
standard-rated.
Supplies to practitioners of the individual ingredients of
herbal remedies are not affected by this decision. The liability of
individual herbs will vary depending on whether they are recognised
generally as culinary herbs, such as parsley or ginger, and so
zero-rated as
food. More detail on the policy on
herbs can be found in
VFOOD9500.
