HMRC refuses to stand down on £470k giant marshmallows case

HMRC refuses to stand down on £470k giant marshmallows case

May 17, 2024

After losing a £470,000 VAT case at the Upper Tribunal over whether giant marshmallows are confectionery, HMRC is taking the fight to the Court of Appeal

Giant marshmallow manufacturer, Innovative Bites, has been on the mind of HMRC for quite some time and it will not be dropping the case after losing out at both the First Tier Tribunal (FTT) and the Upper Tribunal.

HMRC has now been given the go-ahead to take the dispute to the Court of Appeal although a date has not been set for the hearing.

Both tribunals found the consumable was not a confectionary item as it was intended to be roasted over a fire, therefore making it exempt from the usual 20% VAT.

The placement in supermarkets also came into question, as they were mostly sold on a seasonal basis within the barbeque section.

HMRC did not feel this way, issuing demands for VAT amounting to £472,928 in for 2015 to 2019.

Glyn Edwards, VAT Director at MHA said: ‘We all thought this was the end of the giant marshmallows tax debate, but HMRC have decided to appeal again in the hope of finally persuading the tax authorities that size isn’t everything.

‘More seriously the general public might question whether this is the best use of taxpayer’s money when we all know that making any sense of the VAT dividing lines on food has defeated the best legal minds for decades.’