Court of Appeal Overturns VAT Ruling on “Mega Marshmallows,” Emphasizes “Fingers Test” Importance

• Court of Appeal overturned previous VAT decisions on Mega Marshmallows
• Product is larger than standard marshmallows and marketed for roasting
• Initially zero-rated, not considered confectionery
• HMRC argued it should be standard rated as confectionery
• Key decision points included the “Fingers Test”
• Note 5 defines confectionery as sweetened prepared food eaten with fingers
• Previous tribunals did not emphasize the “Fingers Test” enough
• Two routes to standard rating: ordinary understanding and fingers test
• Court rejected previous tribunals’ approach
• Importance of the “Fingers Test” highlighted
• Questioned if size and intended use affect classification
• Case sent back to FTT to assess how product is normally eaten
• Ruling stresses VAT classification must consider the “Fingers Test”
• Ordinary understanding and actual consumption method are crucial

Source: deeksvat.co.uk

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---