BusinessCompany NewsHMRC feels the crunch over Pringles VAT case

HMRC feels the crunch over Pringles VAT case

The HMRC has lost its VAT battle with Proctor and Gamble over whether or not regular Pringles should be subject to VAT

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

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