VAT on Hampers: Lidded Wicker Baskets Ancillary to Food and Drink, Not Separate Supply

Clearwater Hampers Ltd – FTT – single / multiple supplies – whether lidded wicker baskets ancillary to principal supplies of mixed rate food and drink in the baskets – yes – taxpayer win

• The FTT case concerns whether lidded wicker baskets supplied with food and drink hampers should be treated as ancillary to the main food and drink supply, thus sharing its blended VAT rate, or as a separate standard-rated supply. HMRC denied the taxpayer’s claim for repayment of overpaid output tax totaling £425,529 for VAT periods 04/20 to 01/24.
• The taxpayer, an online retailer of gift hampers, argued that the lidded baskets serve the “dual purposes of presentation and protection” and are not an end in themselves for the customer, aligning with the principles of a single supply under the Card Protection Plan (CPP) exception. This argument was successful in a previous claim regarding other container types.
• The Tribunal largely rejected HMRC’s arguments, which relied heavily on HMRC guidance (VAT Notice 701/14 and 700) rather than legal principles, and found that the lidded baskets were ancillary to the food and drink, thus allowing the taxpayer’s appeal.

Source KPMG

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• Clearwater Hampers Ltd appealed HMRC’s refusal to repay output VAT on food and drink hampers packaged in lidded wicker baskets, totaling £425,529.
• The main issue was whether the lidded wicker baskets should be treated as separate standard-rated supplies or as ancillary to the food and drink, sharing their VAT treatment.
• The Tribunal found that the lidded baskets are ancillary to the principal supplies of food and drink in the hampers.
• The appeal was allowed, meaning the baskets share the same VAT treatment as the food and drink items.

Source: caselaw.nationalarchives.gov.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.

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