- The taxpayer created a new product called “Blissfuls” and sought confirmation from HMRC that it was zero-rated.
- HMRC disagreed and deemed it standard-rated. The taxpayer made a sale at zero-rate and appealed HMRC’s decision.
- The product consists of a biscuit cup with chocolate hazelnut, chocolate and a biscuit logo on top.
- The key legislation in this case is Excepted item 2, which standard rates confectionery not including biscuits wholly or partly covered with chocolate.
- The FTT considered that if the biscuit is covered by chocolate to any extent, the excepted item rules apply, and the product is standard rated.
- The FTT concluded that the product is standard rated, and the taxpayer’s appeal was dismissed.
Source KPMG
