In the case of Minerva Research Labs Ltd v HMRC [2026] UKFTT 1320 (TC), the FTT has dismissed an appeal against an HMRC decision that collagen drinks were not “food of a kind for human consumption” and thus zero rating did not apply. HMRC had argued that “the primary reason for consuming the Products…is for anti-ageing benefits rather than nutritional benefits and as such an ordinary person would not consider the Products to be food.”
VAT – collagen drinks – whether food of a kind for human consumption – multifactorial test – weight to be placed on holding out for sale – whether the purpose of consumption relevant – appeal refused
Noting that the “sole issue for determination was whether the Products were ‘food of a kind used for human consumption’ and so zero-rated under Item 1, Group 1, Schedule 8 to the Value Added Tax Act 1994 (‘VATA’)” the FTT first dealt with some preliminary matters, agreeing that:
- “It was common ground that the Products were not excluded from zero-rating as ‘beverages’, because they are not consumed ‘to increase bodily liquid levels, to slake the thirst, to fortify or to give pleasure’ “.
- The correct approach to take was a multi-factorial assessment in order to decide whether the Products were zero-rated.
- The implications of the “standstill” provisions following Brexit should not be considered by the FTT as the matter had not been raised in the Appellant’s grounds of appeal or skeleton argument.
- The zero-rating provisions did not comprise a “perfectly logical and consistent regime”.
- Dictionary definitions add little to the ordinary understanding of the word “food”.
Considering the various factors, the FTT placed significant weight on the following that indicated that the Products might be “food” and should be zero rated:
“(a) the Products nourish the body by providing between 6% and 23% of a person’s daily protein requirement, some energy, vitamins and minerals, and the purpose of food is to nourish the body;
(b) they are held out for sale as providing nourishment for bones, cartilage, muscles, joints, hair and skin, as reducing fatigue, supporting the immune system and contributing to the regulation of hormonal activity; and
(c) they are liquid in form, not tablets or powders.”
However, the FTT placed significant weight on the following factors which suggested that the products were not “food” and thus should be standard rated:
“(a) the Products are held out for sale as ‘liquid beauty products’;
(b) they are purchased for cosmetic and anti-ageing reasons, not to provide protein or energy (there are far cheaper and easily available sources);
(c) they are not marketed to be eaten instead of a meal, or even as a snack;
(d) the use of the words ‘dose’ and ‘treatment’ strongly suggests a medicine, not a food; and
(e) all the Products are labelled with ‘Precautions’ or ‘Warnings’, which is rarely the case with a food.”
In addition, the FTT placed some weight on a further eight factors that suggested standard rating, compared to only two factors that supported the zero-rating argument.
Overall, the FTT concluded that:
“In our judgment, the outcome of the multi-factorial test is that the Products are not ‘food for human consumption’ ….
… In short, Parliament decided what should fall within the zero-rating provisions and what should not, and there is no ‘overall logic or coherence’ in the statutory scheme which would permit us to allow the appeal on the basis that the Products, although not ‘food’, should be zero-rated because, like food, they provide nourishment for the body.”
https://caselaw.nationalarchives.gov.uk/ukftt/tc/2026/1320
Related content from Claritax Books
Value Added Tax, written by Ciaran McGee MA (Oxon), FCA, CTA, is an extensive volume (over 1,000 pages), written primarily for non-VAT specialist accountants and tax advisers.
