The Upper Tribunal has upheld Morrisons’ appeal that the FTT were wrong in law when they judged that certain snack products (Organix and Nakd Bars) should not be zero rated as “food of a kind used for human consumption” but were instead caught by the standard-rate exception for “confectionery” under Item 2 (VATA 1994, Grp. 1 Sch. 8) – WM Morrison Supermarkets PLC v HMRC [2023] UKUT 20 (TCC).
The case has been remitted to the FTT for a new decision.
The UT judged that the FTT had been correct to assess the position by a multi-factorial evaluation of the various attributes of the products, and to come to a view on whether the ordinary person on the street would regard a given product as confectionery. However, by failing to consider the perceived healthiness of the products and the amount of cane sugar, flour and butter they contained relative to traditional confectionery, the FTT had erred in law.
Consideration was made as to whether it was necessary to establish that the FTT had been perverse in its judgment, i.e. that it is only where a tribunal has failed to take into account a matter, which no tribunal properly instructed would have left out of account, that there is an error of law. This was held to be unnecessary.
The errors were also judged to be sufficiently material to affect the decision.
https://www.bailii.org/uk/cases/UKUT/TCC/2023/20.html
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