Max Schofield in VAT on Sports Drinks appeal
Global by Nature are distributors for a number of health and wellbeing products, including Sunwarrior plant-based protein powders. HMRC contended that the vegan powders were standard rated as “Sports drinks that are advertised or marketed as products designed to enhance physical performance, accelerate recovery after exercise or build bulk, and other similar drinks”. The taxpayer appealed to the FTT.
The Tribunal considered various arguments on statutory interpretation and detailed two possible readings. The overall conclusion was that the products under appeal correctly fall to be zero rated, and should not be considered a standard rated “sports drinks” under Excepted Item 4A, a provision introduced into the Value Added Tax Act in 2012.
Under the first interpretation, all three disputed Sunwarrior Products were found not to be “sports drinks”, and therefore should be zero rated. In its alternative secondary interpretation, the Tribunal stated that on the facts two out of three of the products should still be zero rated as they were not advertised or marketed as products designed to enhance physical performance, accelerate recovery after exercise or build bulk.
This is the first time that the Tribunal has analysed the specific and detailed wording and purpose of Excepted Item 4A.
Max Schofield acted for the successful taxpayer, instructed by Daniel Rice, VAT Director and Head of Food & Beverage at Grant Thornton UK LLP.
If you would like to know more about this appeal, or would like to instruct Max Schofield, please contact Rob Adams.
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