Innate-Essence Limited v The Commissioners for HMRC
Decision date: 17 April 2023
Neutral citation: [2023] UKFTT 371 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
Innate‑Essence Ltd appealed HMRC's refusal to correct VAT treatment of its 60ml turmeric "Shots", arguing they are zero‑rated food rather than standard‑rated "other beverages". The Tribunal applied a multi‑factorial test, including established beverage indicators (thirst‑quenching, fortifying, pleasure, substitution) and found the Shots were consumed for regular long‑term health benefits, had an unpleasant taste, small single‑dose packaging and were marketed as health products. The Tribunal held the Shots were not "other beverages" and therefore were correctly zero‑rated as food; the appeal was allowed.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The binding reasoning is that classification between food and an excepted beverage requires a context‑sensitive, multi‑factorial assessment of how a product is marketed, why and how it is consumed, and its characteristics; where a liquid is primarily consumed as a regular health supplement (not to quench thirst, give immediate fortification, provide pleasure, or substitute a meal), it can fall within zero‑rated food rather than the "other beverages" exception.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal suggested, not as binding law, that "fortify" for the beverage test carries an implication of an immediate or short‑term boost rather than long‑term nourishment, and that the "commonly consumed" limb of the Bioconcepts test should be understood as whether common reasons for consumption map to the listed purposes rather than requiring widespread popularity.