VAT on Flavoured Frappes

by **AndyMusetti** on Thu Dec 01, 2011 1:48 pm

We currently sell four different types of milk and ice based frappes:

Sticky Toffee
Vanilla
Coffee
Chocolate

I believe that as they are milk based products, they should be zero rated - can anyone advise if this is correct?

by **pawncob** on Sun Dec 04, 2011 9:21 pm

They appear to be standard rated.

http://www.hmrc.gov.uk/manuals/vfoodmanual/vfood5520.htm

by **AndyMusetti** on Tue Dec 06, 2011 5:49 pm

That seems to be referring to products sold that are frozen. This is not frozen and is a drink.

I have this link which seems to indicate that it can be zero rated, but im not 100%. Could you give your opinion?

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_PublicNoticesAndInfoSheets&propertyType=document&columns=1&id=HMCE_CL_000118#P314_17347

Section 3.7.2 says about zero rating flavoured milk drinks and also specifies coffee extracts for flavouring shakes.

Thanks for your time.

by **pawncob** on Tue Dec 06, 2011 5:57 pm

If it's 45% milk content, it's zero (maybe).
http://www.hmrc.gov.uk/manuals/vfoodmanual/VFOOD7660.htm

Note the tribunal said HMRC's view was wrong. Doesn't appear that HMRC have changed their mind.

Ask Spidersong.

by **Generix** on Tue Dec 06, 2011 5:58 pm

AndyMusetti wrote:That seems to be referring to products sold that are frozen. This is not frozen and is a drink.

I have this link which seems to indicate that it can be zero rated, but im not 100%. Could you give your opinion?

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_PublicNoticesAndInfoSheets&propertyType=document&columns=1&id=HMCE_CL_000118#P314_17347

Section 3.7.2 says about zero rating flavoured milk drinks and also specifies coffee extracts for flavouring shakes.

Thanks for your time.

If it is for take-away, I would guess it could be zero-rated, would depend on how milk based it is? If its predominately milk with some sort of flavouring you should be all good.

I tend not to remember all the various cases on food as they invariably bring up crazy points which seem to bear no relation to law but are considered by the panel nonetheless. As a result the rules for food (and drink) are a law unto themselves.

Remember that ones sold for drinking on your premises are always SR, as a supply of catering. So you also need to be in a position to differentiate such sales if in fact you have e.g. seating area/bar where customers can stay and drink.

by **section 44** on Tue Dec 06, 2011 5:59 pm

A difficult question.

AndyMusetti wrote:but im not 100%

Out of interest, as a percentage, how accurate do you consider your answer of zero-rated to be?

AndyMusetti wrote:Could you give your opinion?

Standard-rated (on the basis of being a beverage).

by **section 44** on Tue Dec 06, 2011 6:10 pm

Generix wrote:I tend not to remember all the various cases on food as they invariably bring up crazy points which seem to bear no relation to law but are considered by the panel nonetheless.

Only this week I was reading the tribunal's decision in the Disco's crisps case and I found it difficult to reconcile with my (admittedly vague) recollection of the Pringles case. The former put much weight on wheat, as opposed to potato, being the main ingredient (ignoring oil) whereas I recall (vaguely) that in the latter they looked at how the consumer would regard the product notwithstanding that its potato content was low.

by **Generix** on Tue Dec 06, 2011 6:20 pm

section 44 wrote:
Generix wrote:I tend not to remember all the various cases on food as they invariably bring up crazy points which seem to bear no relation to law but are considered by the panel nonetheless.

Only this week I was reading the tribunal's decision in the Disco's crisps case and I found it difficult to reconcile with my (admittedly vague) recollection of the Pringles case. The former put much weight on wheat, as opposed to potato, being the main ingredient (ignoring oil) whereas I recall (vaguely) that in the latter they looked at how the consumer would regard the product notwithstanding that its potato content was low.

Yep, pretty much. Makes my head spin sometimes...they should just have done with it, and either modernise the law or remove it altogether.

by **section 44** on Tue Dec 06, 2011 6:24 pm

A bag of salted pistachios zero-rated, a bag of salted peanuts standard-rated. I appreciate that the legal distinction is around the shell but where is the rationale?