Judges dismiss HMRC Appeal against bar owner over “Super Juices”

Judgement has been given in favour of a bar owner in an appeal by HMRC over VAT payments for “Super Juices”.

The Upper Tribunal of the Tax and Chancery Chamber have published their decision to dismiss the appeal by HMRC against the First-Tier Tribunal judgement in 2018, which found in favour of The CORE ( Swindon) Limited.

The Business operates a juice bar at its premises which offers juice cleanse programmes (“JCPs”) that consist of fresh drinkable products made from juicing raw fruits and vegetables.

It had applied to classify these as Zero Rated for VAT purposes rather than HMRC decision to class them as “beverages” and so liable to VAT.

The First Tier Tribunal ( “FTT” ) had accepted The Core’s contentions that the JCPs were not “beverages” and therefore did not fall within the scope of excepted Item 4 to Group 1 Schedule 8 VATA, which would have meant paying standard rate VAT upon them.

In their Judgement for the Upper Tribunal of the Tax and Chancery Chamber, The Hon. Mr Justice Zacaroli (Chamber President) and Judge Timothy Herrington concluded:

“ (1) that the FTT considered all relevant factors in reaching its conclusions,

  (2) that the weight to be applied to the relevant factors on a multifactorial assessment is a matter for the FTT, which should not be interfered with

        on appeal unless the conclusion reached is plainly wrong or irrational, and;

 (3) that we do not think there is any such error in the Decision. 

We therefore see no basis on which we should interfere with the Decision”.

Mr Talikowski the owner of the bar has been reported as saying:

“One of our main arguments is that the programmes are used by our customers as meal replacements. This is not the same as buying a drink because you are thirsty or as a treat. Our juice programmes also have health benefits and are also used by several of our clients to aid their own weight loss journeys……There is also the fact that VAT can often disadvantage smaller traders and producers in the food and drink sector who have to pass on those costs to the consumer. They don’t have the economies of scale of much bigger brands.”

A link to the Case report of  HM Revenue v The Core (SWINDON) Limited [2020] UKUT 0301 (TCC) can be found here.

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