VATupdate

Upper Tribunal Sides With Morrisons in Confectionery VAT Dispute

UK supermarket chain Morrisons recorded a legal victory in a ruling published Tuesday, after a UK court accepted its appeal in a dispute over whether its snack bars should be considered cakes for sales tax purposes.

VAT – whether certain Organix and Nakd bar products fell within exception to zero-rating as “confectionery” in  Item 2 of Group 1 of Schedule 8 of VATA 1994 – relevant test regarding error of law where allegation tribunal failed to take account of relevant factor – whether necessary to show FTT perverse in failing to take account of factor- no – whether FTT erred in ruling out of consideration healthiness, and comparison of ingredients in traditional confectionery on basis of case-law (High Court decisions in Kalron  and Premier Foods) – yes –whether errors material applying test set out by Court of Appeal in Degorce– yes-  appeal remitted to FTT for new decision

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