Sweet as candy

The taxpayer company made fruit bars which had no added sugar. HMRC assessed them to VAT under VATA 1994, Sch 8 group 1 item 2 as confectionery. The taxpayer appealed.

The VAT tribunal said that confectionery was normally eaten with the fingers, made with a cooking process and contained sweetening matter. They decided on that basis that the fruit bars were not confectionery within item 2, as they were not cooked and did not contain sweeteners.
HMRC appealed claiming that the tribunal had erred in law.

In the High Court, the judge said that as the tribunal had applied a dictum which had been directed to a different statute, there had been an error of law.

This gave rise to two further errors in that it had directed itself to declare that for a product to be treated as confectionery it had to be cooked and contain sweetening. These were not necessary conditions for products to be classed as confectionery.

The case would be remitted to a differently constituted tribunal for rehearing.HMRC's appeal was allowed.

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