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Nakd bars are standard-rated confectionery

08 April 2024
Issue: 4932 / Categories: Tax cases
WM Morrison Supermarkets plc (TC9095)

In 2021 WM Morrison Supermarkets plc appealed the decision of HMRC that whole food bars manufactured by Organix and Nakd were standard rated as confectionery rather than a zero-rated food item. Confectionery is an exception to the zero rating of food and drink along with other items such as ice-cream crisps and alcohol products. HMRC had rejected a £1.1m rebate claim by Morrison and at a First-tier Tribunal hearing in spring 2021 (TC8087) the judge agreed with HMRC that the bars were subject to VAT.

The supermarket appealed that decision to the Upper Tribunal which remitted the case back to a different First-tier Tribunal panel to consider the healthiness of the product and also if they were excluded from the definition of confectionery because they did not contain ingredients such as cane sugar butter and flour. These two issues had not...

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