Specialised food products which are recognised as normal and necessary food by a particular group of people are treated in the same way as other foods for VAT purposes. The main borderlines which produce difficulties are:
To come to a decision, you will need to examine how they are:
There is a wide range of products available for athletes and body builders. The apparent similarity of these products has meant that there has been some confusion about the VAT liability of some of them, which prompted a review of their VAT treatment in 1997. The aim of this review was to ensure a level playing field.
These include:
Some of these may contain recipes or be described as foods. However, their primary use is as a beverage, and so all are standard-rated unless they are preparations of milk, egg or meat or are otherwise covered by the overriding items, and so zero-rated.
These are standard-rated, with the exception of glucose, dextrose and Horlicks® tablets.
Products intended to meet the specialist needs of athletes are
not excluded from being considered as confectionery. The tribunal,
in their decision in the case of
E J Huczek (V.8850), stated:
Having carefully considered the product we
considered the Appellant's arguments thatthe market was restricted to specialist
consumers and that the price was so high compared toother confectionery items in bar form that
only specific specialist sportsmen would purchasethe bars. We conclude that these arguments are
irrelevant. Whilst the Appellant's marketingintentions are not challenged we cannot see
any reason why sales should be so restricted andthe product could easily be sold through
chemist shops, health food shops and other outlets,even the traditional vendor of confectionery.
The price cannot influence the nature of aproduct.
Whilst the tribunal in the case of
Science in Sport (V.17116) decided that
a sports bar was zero-rated, this was on the basis that they found
that it was not an item of sweetened prepared food and not
confectionery on that basis.
Compressed fruit bars, consisting mainly of fruit and nuts,
with added sweetening matter, and cereal bars, whether or not
covered in chocolate, with the exception of bars which qualify as
cakes, are standard-rated. Fruit bars are also confectionery if
there is no added sweetening matter, though this matter is the
ongoing subject of the
Premier Foods case (
V.20072 and
[2007] EWHC 3134 (Ch)).
Creatine is not a recognised food product, and so foods which are wholly or mainly made of creatine are standard-rated. Where it is clear that the main benefit to the consumer is the carbohydrate, protein or fat element, then it is considered to be food, and will be zero-rated unless it falls within one of the excepted items.
Foods sold as aids to slimming should be considered using similar criteria to those given above for sports foods:
In the case of Texas Touch Dallas Diet Ltd (EDN/83/0067), the tribunal considered a bar made of peanuts, bran, honey and other ingredients, which was intended to replace meals as part of a slimming plan. It was not sold through normal retail outlets but through a health store and slimming clubs. Though it looked similar to normal confectionery bars, it was found to be sickly and unpleasant in taste, such that it was unlikely that anyone other than a determined dieter would want to eat it. The tribunal accordingly found that it was not confectionery, and it was zero-rated as food within Group 1.
Foods that meet the very specific legislative criteria that
define
meal replacement products can be
zero-rated. The legislation in question is
SI 1997/2182 concerning
Foods Intended for Usein Energy Restricted Diets for Weight
Reduction Regulations 1997. This in turn enacted
Commission Directive 96/8/EC on the
same subject.
The legislation is very specific about what can claim to be
a
meal replacement product and such a
foodstuff must meet very detailed requirements about its content
and ingredients. If a trader claims that a foodstuff is a meal
replacement product, they must be able to demonstrate that it meets
these criteria.
Such a product provided in the course of
catering would be standard-rated: the zero rating
would only apply to any retail sale of those products.
Diabetic foods are treated in the same way as any other food, and are eligible for zero rating unless they fall within the excepted items, such as confectionery specifically for diabetics, which is standard-rated.
There are no special rules for health foods, so the normal rules
apply. However, there have been several tribunal cases relating to
products designed to be taken as food supplements for health
purposes, particularly in the form of tablets. HMRC’s policy,
consistently upheld by the tribunals, is that such products are not
food for the purposes of
Group 1, and so are standard- rated.
In the following cases, products sold as health supplements
of various kinds were found by the tribunal not to be food, and
therefore standard-rated:
Food prepared under religious rules such as Kosher or Halal is eligible for zero rating on the same basis as other foods.
These consist of a package containing all of the raw ingredients
necessary to make a specific recipe sold with the package. Usually
these comprise zero-rated foodstuffs but often include small
amounts of standard-rated items, for example pieces of chocolate or
small amounts of alcoholic beverages to be used in making sauces.
It is our view that these are entirely zero-rated as food
for human consumption. The standard-rated items are minor and are
sold for the further enjoyment of the zero-rated foodstuffs which
form the majority of the supply. It is not a supply of catering, as
the food requires further preparation.
