- Court of Appeal overturned previous VAT decisions on Mega Marshmallows
- Product is larger than standard marshmallows and marketed for roasting
- Initially zero-rated, not considered confectionery
- HMRC argued it should be standard rated as confectionery
- Key decision points included the “Fingers Test”
- Note 5 defines confectionery as sweetened prepared food eaten with fingers
- Previous tribunals did not emphasize the “Fingers Test” enough
- Two routes to standard rating: ordinary understanding and fingers test
- Court rejected previous tribunals’ approach
- Importance of the “Fingers Test” highlighted
- Questioned if size and intended use affect classification
- Case sent back to FTT to assess how product is normally eaten
- Ruling stresses VAT classification must consider the “Fingers Test”
- Ordinary understanding and actual consumption method are crucial
Source: deeksvat.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
