Ferrero UK Limited v The Commissioners for HMRC
Decision date: 18 August 2025
Neutral citation: [2025] UKFTT 1202 (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
Ferrero challenged HMRC's decision that its "Nutella biscuits" were standard-rated on the basis they were "biscuits... partly covered with chocolate or some product similar in taste and appearance" in Schedule 8 Group 1 Excepted Item 2 VATA. The First-tier Tribunal applied an ordinary‑language/contextual test focusing on the finished product's outer surface as perceived by an informed consumer and held that the biscuits were not partly covered because the chocolate‑like ring and filling sit beneath the baked outer surface and do not form part of that surface. HMRC's assessments were therefore not supported on that basis; permission to appeal was noted as available.
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's ratio is that "partly covered" must be assessed by examining the outer surface of the finished product as a whole and asking whether a chocolate‑like substance has been laid over that surface so as to form, in whole or in part, the outer surface as perceived sensibly by an informed consumer; the covering must be more than de minimis, and chocolate embedded in dough or forming an internal filling/sandwich layer does not qualify.
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 commented that consumer surveys should be given limited weight where the statutory test is an objective one for the tribunal to apply, noted potential factual distinctions from prior Tribunal decisions (such as Blissfuls) that may explain divergent outcomes, and said it did not need to decide issues of fiscal neutrality.