VAT Classification of Protein Powders: Global by Nature Ltd v HMRC Case Analysis

Update January 29, 2025

Global By Nature Ltd – whether products are standard rated as “sports drinks” – HMRC is seeking permission to appeal to the UT

• HMRC Seeks Permission to Appeal: HMRC is seeking permission to appeal to the Upper Tribunal (UT) regarding the classification of powdered vegan food supplements sold under the “Sunwarrior” brand as “sports drinks” for VAT purposes.
• Background on VAT Classification: This case revolves around the interpretation of excepted item 4A in VATA 1994 Schedule 8 Group 1, which standard rates certain drinks marketed for enhancing physical performance. The First-tier Tribunal (FTT) previously ruled that a product must meet a two-stage test to be classified as a sports drink under this provision.
• FTT’s Conclusion Against HMRC: The FTT found that the products in question did not qualify as sports drinks because they did not meet the necessary marketing criteria set out in item 4A. As a result, the FTT disagreed with HMRC’s classification and concluded that the products were not standard rated as sports drinks.

Source KPMG

---

Posted January 29, 2025

• Global by Nature Ltd v HMRC [2025] UKFTT 24 (TC)
• FTT considered if powdered food products were standard-rated as “sports drinks”
• GBN argued Sunwarrior protein powders should be zero-rated as food
• HMRC contended they were standard-rated due to marketing claims
• FTT allowed GBN’s appeal, finding Sunwarrior products not “sports drinks”
• Product must contain significant carbohydrates and electrolytes to qualify
• Packaging and marketing emphasized general nutrition over sports-specific benefits
• GBN did not market products primarily to gyms or sports professionals
• Decision clarifies VAT classification based on composition and intended use
• Businesses should assess VAT treatment of protein powders and supplements

Source: rpclegal.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.

---

---