In United Biscuits (UK) Ltd v HMRC [2023] TC8941, the First Tier Tribunal (FTT) agreed with HMRC that 'Blissfuls' biscuits were partly covered by chocolate making them standard-rated for VAT.

  • United Biscuits (UK) Ltd manufactures McVitie’s Blissfuls biscuits.
  • A Blissfuls biscuit consists of a biscuit cup with a flat bottom base, covered in a layer of chocolate hazelnut, a layer of chocolate and a McVitie’s logo made of biscuit on top. The top layer of the biscuit does not cover the entirety of the biscuit and some of the underlayer remains exposed.
  • The taxpayer Zero-rated sales for the product. HMRC took the view that the biscuit was standard-rated for VAT. The taxpayer Appealed.
  • Both parties agreed that the product was a biscuit and so fell within Sch 8 Group 1 of VATA 1994, as being 'food of a kind used for human consumption'.
  • Items excepted from Sch 8 Group 1 include ' biscuits wholly or partly covered with chocolate or some product similar in taste and appearance'.
  • The biscuit ‘lid’ was considered by United Biscuits to serve more than a decorative function, as it ensured the Blissfuls biscuits kept their structure and provided a crunch element before the consumer tasted the chocolate filling.
  • HMRC argued that the appellant was seeking more from the statute than the wording allowed. The test was not whether the biscuit was a 'sandwich' type (where part of the filling is visible) nor whether the part not covered by the top layer of biscuit was 'covering' or 'filling'. Instead, HMRC argued the top layer was part biscuit and part chocolate.

The FTT found that:

  • Caselaw stated that the words in the legislation should have their ordinary meaning.
  • The relevant test to apply was that of the ‘ordinary man’ in possession of the same facts as the tribunal.
  • The question to be answered was what covered the remaining area of the product that was not covered by the biscuit lid.
  • The legislation did not require one layer to be higher than another to be classed as covered and having a layer within the biscuit cup did not prevent it from being a 'covering'.
  • The view of the ordinary man in the street would be that the biscuit was, in fact, covered 'in part' by a layer of chocolate.
  • The Blissfuls biscuits fell within Excepted Item 2 of Sch 8 Group 1 and was a standard-rated item.

The appeal was dismissed.

Useful guides on this topic

Rates & Fractions (VAT)
What is the VAT rate? What is the VAT fraction for VAT at 5% or 12.5% or 20%? How do I calculate VAT?

Food, Catering and takeaway
What is the VAT rate charged on food? How does this differ depending on hot or cold food and food consumed on or off the supplier's premises? 

Appeals: VAT
How do I appeal a VAT penalty?  How can I request a Statutory Review? How do I appeal an HMRC decision? 

External link

United Biscuits (UK) Ltd v HMRC [2023] TC8941

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