Effect of roasting marshmallows on zero or standard rating

The taxpayer sold American sweets and treats including large marshmallows called ‘mega marshmallows’.

HMRC assessed the taxpayer to VAT on the basis that the products were standard rated as an item of confectionery rather than zero rated as a food product. The taxpayer highlighted the fact that the intention was for the product to be roasted over a campfire or barbecue and then eaten or used as an ingredient in a ‘s’more’ (a traditional American night-time campfire treat consisting of a roasted marshmallow and a layer of chocolate between two digestive biscuits). As the intention was not for it to be eaten without roasting it could not be classed as confectionery.

The legislation zero rates food as a starting point by virtue of VATA 1994 Sch 8 group 1 but then there are exceptions including items of confectionery. Note 5 of the group confirms that confectionery includes...