- The Court of Appeal (CoA) ruled that the taxpayer, Innovative Bites Ltd, failed to demonstrate that their jumbo marshmallows do not qualify as “confectionery,” resulting in a standard VAT rate rather than zero-rating for food, as they are considered sweetened food typically eaten with fingers.
- The original First-tier Tribunal (FTT) had concluded that the marshmallows were zero-rated based on their size, marketing, and suitability for roasting, but the CoA found that the taxpayer did not adequately prove that the product was not normally consumed as confectionery.
- The CoA remitted the case back to a differently constituted FTT, emphasizing that the taxpayer had not discharged the burden of proof regarding the product’s classification and that it could reasonably be viewed as confectionery.
Source KPMG
