Innovative Bites Limited v The Commissioners for HMRC
Decision date: 21 September 2022
Neutral citation: [2022] UKFTT 352 (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 "Mega Marshmallows" were "confectionery" for VAT purposes or instead zero-rated as food. The tribunal found, on a multifactorial factual assessment of the product, its packaging, marketing, retail placement and likely consumer use (notably promotion and habitual sale for roasting/s'mores), that the Product was not "confectionery" within Excepted Item No.2 Group 1 Schedule 8 VATA 1994. The appeal was allowed and the Product was treated as zero-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 tribunal applied a fact-and-degree, multifactorial characterisation test for VAT classification, giving weight to the product’s physical nature, packaging and instructions, marketing and how it is habitually sold and used by consumers; an item marketed, packaged and habitually sold for further cooking (here, roasting) and positioned outside confectionery aisles can fall outside the statutory term "confectionery" even if sweet and manufactured by mixing ingredients.
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 judgment indicated that marketing alone is not determinative and only gains weight where there is evidence that consumers follow the marketed use; similarly, the manner of eating (for example use of a stick when roasted) was of limited weight in the tribunal’s assessment.