Cakes? Confectionary? Something else? The First Tier Tribunal recently found that twin packs of sports nutrition bars containing a flapjack and cake bar or brownie were standard-rated for VAT purposes, being confectionery.

  • In Duelfuel Nutrition Limited v HMRC [2024] TC09055, Duelfuel made and sold twin packs of sports nutrition bars.
    • Each pack contained a flapjack, to be eaten before working out.
    • This was accompanied by either a cake bar or brownie, designed to aid recovery after exercise.
  • In October 2021, Duelfuel sought clearance from HMRC regarding the VAT treatment of the products.
  • HMRC issued their decision in January 2022 that the products were standard-rated confectionary.
  • Duelfuel Appealed to the First Tier Tribunal (FTT).

Supplies of Food of a kind used for human consumption are zero-rated for VAT. This is subject to some exceptions, such as confectionery, which is standard-rated, except in the case of cakes, which remain zero-rated.

Among other things, confectionery includes any item of sweetened prepared food which is normally eaten with the fingers.

The FTT found that:

  • The concept of a flapjack had a problematic position in the categorisation of cakes for VAT purposes.
    • HMRC has historically treated ‘traditional’ flapjacks, made of oats, butter and syrup, as cakes for VAT purposes, unless they represent cereal bars or contain non-traditional ingredients.
  • The description of one of Duelfuel's products as a flapjack was irrelevant. The first question to consider was whether the products were cakes or not.
  • The products were not zero-rated cakes.
    • An ordinary person would consider a typical cake to be a high-calorie food eaten by all generations as a treat.
    • A multifactorial assessment of the bars was undertaken. While the products had the appearance of cakes, other factors indicated that an ordinary person would not consider them cakes:
      • Ingredients: the ingredients are very different from conventional cakes, with flour being substituted by powdered soya protein isolate, milk protein concentrates and bovine collagen protein. Typical eggs and fats were replaced by cooking oil, water and brown rice syrup. Vitamin and mineral blends were also included.
      • Taste and texture: the products were heavier than a typical treat. The consistency was denser than expected and there was an unpleasant mouth feel and dryness. They were not of a standard to be served to guests as a treat.
      • Packaging: the packaging was aimed at gym customers wanting to eat on the go. This was not typical of a cake.
      • Marketing: the products were not marketed as normal cakes, but rather as for those going to the gym and doing strenuous exercise. The optimal nutritional benefits of the products were promoted. This was strongly indicative of the products not being cakes.
      • Consumption circumstances: the products were intended to be eaten before or after exercise and so would not be eaten in the typical circumstances where cakes might be eaten. They would usually be eaten by adults, not consumers of all ages.
    • The products were standard-rated as confectionery.
      • The bars were sweetened prepared food, normally eaten with the fingers. This meant that they were deemed to be confectionary under Note 5 of VATA 1994, Schedule 8, Group 1.
      • This deeming under Note 5 did not give an absurd result and therefore took precedence over the FTT’s finding that the products would not be confectionery on general principles, had a multifactorial assessment been carried out.

The appeal was dismissed.

Useful guides on this topic

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

Duelfuel Nutrition Limited v HMRC [2024] TC09055