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Allergen-free chocolate is not food for VAT purposes

There's been a recent dispute settled about the VAT treatment of what was being described as 'allergen free' chocolate.

The case was fought between Kinnerton Confectionery Limited and HMRC  and the Tax Tribunal  decided that an allergen-free chocolate bar was standard rated as confectionery and was not food for VAT.

The case history:

  • HMRC decided that Kinnerton's allergen-free chocolate bar was standard rated and raised a VAT assessment for £260,000.
  • Kinnerton then appealed on the basis that it was cooking chocolate and should be zero-rated as food.
  • Kinnerton also argued that it is in the public interest to find in its favour so that those allergic to normal chocolate are not disadvantaged by VAT.

The Tribunal disagreed with Kinnerton and made the following comments:

  • The chocolate was held out as confectionery and not for cooking.
  • It was sold alongside other confectionery items in supermarkets, not in the bakery isle and was sometimes sold with an Easter egg.
  • It did not say it was cooking chocolate, the packaging mentioned portion size which is not normally the case with cooking chocolate. No recipes were included on the wrapper. 
  • Kinnerton’s website positioned the bar next to other confectionery items, did not say it could be used for cooking and did not provide any recipes. 
  • All other Kinnerton items are confectionery.

The Tribunal also dismissed the public interest argument on the basis that Kinnerton could, if it wanted to, make an allergen-free chocolate and hold it out for cooking such that it qualified for zero-rating.



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