Where VAT is concerned, size does matter – for marshmallows!

HMRC has recently lost a long running case over the VAT status of giant marshmallows with the Upper Tribunal ruling that they are not confectionery!

Innovative Bites were facing a VAT bill of £472,928 but the Upper Tribunal has agreed that the giant marshmallows are not subject to the standard VAT rate as they are designed to be roasted over a fire.

Whilst many cases involving food and HMRC have not gone well recently, in particular protein bars and Morrisons, there is finally some good news.

Giant marshmallows are now confirmed to be zero rated, as are tiny ones (cooking ingredients) so just ‘normal’ sized ones will be subject to the 20% VAT.

VAT and food is a very contentious area, and one with some of the most well known VAT cases (who remembers Jaffa cakes).

Any businesses involved might need to revisit product liabilities and we have experience, so get in touch if you need our advice at hello@chw-accounting.co.uk


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

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