HMRC VAT win in Hartley’s fruit bar battle

The High Court has supported a HM Revenues
& Customs
appeal and overturned a March ruling by the VAT tribunal which
qualified Premier Foods’
unsweetened Hartley’s fruit bars, without the look or taste of sweets or
chocolates, as food and zero-rated as opposed to confectionery which is cooked
and includes sweeteners, taxed at 17.5%.

The High Court said products did not necessarily have to be sweetened or
subjected to any particular process to be deemed confectionery. The case will
now go back to the VAT tribunal for a further hearing, reports.

Steve Hodgetts, Baker Tilly VAT partner, said HMRC appeared to be moving
towards a more subjective assessment of confectionery. He said this would add to
food manufacturers’ concerns about the unpredictability of the tax authorities’
stance on the VAT status of their products.

The Hartley’s fruit bars, promoted as the equivalent to one fruit portion and
ideal for school lunch boxes, were launched in June 2005 but withdrawn from the
UK market by March 2006.

Further reading:

AIC wins ?300m VAT test case against HMRC

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