An appeal launched by Proctor and Gamble at the High Court to prove its product, Pringles, is more dough than potato and therefore not subject to VAT has been won.

The court ruled among other reasons, that the snack was only 42% potato and that they were not packaged for human consumption without further preparation, making them outside the VAT charge as they lacked the necessary potato content.

Proctor and Gamble had taken the issue to the High Court as an earlier VAT and Duties tribunal had ruled that the Pringle was a potato crisp and subject to VAT.

Mr Roderick Cordara representing Proctor and Gamble, which stands to save millions from the decision, has said only Pringles will be affected by the decision. Justice Warren residing did not completely agree and has granted HMRC extra time to consider its options before making a decision as to whether it should appeal or not.

Warren said: 'Although Mr Cordara says that it is only Pringles which are affected by my decision, I do not know that there are no other products on the market whose taxability turns on the "made from" point. HMRC need time to access the economic consequences of my decision before deciding whether to seek permission to appeal. I extend the time for the Appellant's notice as requested by HMRC, to 8 August 2008.'

Further reading:

HMRC wins snacks appeal