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Fruit bar VAT case to be heard again

01 November 2007
Categories: News , VAT
A tribunal will once again chew over a tax debate concerning kids' snacks, following a High Court ruling

In March this year, manufacturer Premier Foods won an appeal at tribunal with the result that no VAT was due on the sale of its Hartley's Fruit Bars, which are aimed at encouraging healthier eating among children.

HMRC appealed against the decision, leading to the High Court ruling that the case had been resolved on incorrect principles and must go back for a further hearing.

The first tribunal had agreed that no VAT was due on Premier's pressed fruit bars because they have no added sugar and are therefore not confectionery.

However, the High Court agreed with HMRC that it was irrelevant if sugar is added or if the bars are subject to a cooking process when deciding whether or not a food item can be deemed to be confectionery.

Steve Hodgetts, VAT partner at Baker Tilly, said: 'This is a setback for food manufacturers grappling with the status of food items such as chewy bars, fruit bars and other snack foods.

'Given the unpredictable nature of these rulings, manufacturers and retailers of these items should seek professional VAT advice.'

Categories: News , VAT
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