Ferrero Wins VAT Appeal: Nutella Biscuits Ruled Zero-Rated, Not Luxury Items

• Ferrero UK Limited won an appeal against HMRC regarding VAT classification of Nutella biscuits after a tribunal ruled they are not partly chocolate covered
• HMRC wanted to classify the biscuits as luxury chocolate items subject to 20% VAT but the tribunal examined the product structure and disagreed with this assessment
• The tribunal found that the outer surface was not covered in chocolate so the biscuits qualify as basic foodstuffs with zero VAT rating instead
• This case demonstrates the complexity of UK food VAT rules where small classification differences determine whether products face zero rating or 20% luxury tax
• The ruling may establish precedent for similar products and help businesses reduce costs while clarifying VAT status for items between luxury and basic food categories

Source: meridianglobalservices.com

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.

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