Bottled Science Limited v The Commissioners for HMRC
Decision date: 4 July 2024
Neutral citation: [2024] UKFTT 592 (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
This appeal concerned whether Skinade, a 150ml labelled "food supplement" collagen drink, was "food of a kind used for human consumption" and thus zero-rated for VAT. The tribunal applied a multi‑factorial "broad-minded VAT payer" test considering form, palatability, nutritional value, directions/use, packaging/marketing and route to market, and gave decisive weight to the product's packaging, marketing and channels of sale. It found that, although Skinade has some nutritional content, its primary purpose and manner of supply meant it was not food within Item 1, Group 1, Schedule 8 VATA. The appeal was dismissed and the product is standard‑rated.
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: high
The decision adopts a multi‑factorial approach: classification asks what a well‑informed, broad‑minded VAT payer would conclude from all the facts, with relevant factors including form, palatability, nutritional value, directions/use, packaging/marketing and route to market; some nutritional value may be necessary but is not sufficient, and packaging/marketing and typical channels of sale can be determinative.
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 observed (non‑bindingly) that zero‑rating provisions should be construed strictly but not so narrowly as to defeat their purpose; ingestion alone or the presence of food ingredients does not automatically make a product "food" for VAT purposes; and marketing a product as therapeutically beneficial does not by itself exclude it from being food, though such marketing can be decisive in context.