The dispute concerns large marshmallows, which are marketed as perfect for roasting and s’mores. HMRC argued that the marshmallows could be eaten as a snack and were listed as sweets on the taxpayer’s website. The First-tier Tribunal (FTT) considered various factors and concluded that the marshmallows were not confectionery and should be zero-rated. The Upper Tribunal (UT) supported the FTT’s approach and dismissed HMRC’s arguments.
Source KPMG
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