Healthiness of the products should be taken into account

In 2017-18 Morrison claimed that more than £1m output tax had been overpaid on various types of ‘Nakd’ raw fruit and nut bars and children’s Organix bars. The supermarket said the bars had been wrongly standard rated and should be zero rated.

HMRC said the bars were standard rated as confectionery and refused the claim.

Agreeing with HMRC the First-tier Tribunal dismissed the taxpayer’s appeal. The taxpayer appealed.

The Upper Tribunal said the First-tier Tribunal had erred in law in deciding the healthiness of the product and its marketing as such was irrelevant to the question of whether the products were ‘confectionery’.

The judge also agreed with the taxpayer that the First-tier Tribunal had erred in law in failing to consider that the absence of traditional confectionery ingredients used in the bars such as cane sugar butter and flour was a relevant factor.

These errors of law were...