Key Facts
- •Bottled Science Ltd appealed HMRC's decision to standard-rate their collagen drink 'Skinade'.
- •The central issue was whether Skinade is 'food of a kind used for human consumption' under VATA 1994.
- •Skinade is marketed as an anti-aging drink promoting better skin.
- •Skinade contains hydrolysed marine collagen, vitamins, and other ingredients.
- •It's sold primarily through aesthetic clinics and online, not in typical food retail outlets.
- •The Tribunal considered Skinade's nutritional value, palatability, marketing, packaging, and overall presentation.
Legal Principles
Zero-rating provisions under VATA 1994 are to be interpreted strictly.
News Corp UK & Ireland Ltd v HMRC [2023] UKSC 7
In classification cases, a multifactorial assessment is needed, considering factors like marketing and intended use.
The Core (Swindon) Ltd v HMRC [2020] UKUT 0301 (TCC)
The classification of a product should not depend on a particular consumer's subjective intentions but on objective factors like packaging and marketing.
Phoenix Foods Ltd v HMRC [2018] UKFTT 018 (TC)
Whether a product is 'food' is determined by asking what a reasonable view, informed by the evidence, would be.
CCE v Ferrero UK Limited [1997] STC 881; Procter & Gamble UK v Revenue and Customs Commissioners [2009] EWCA Civ 407
A product's nutritional value is relevant, but not solely determinative; the overall purpose of consumption is also crucial.
Staatssecretaris van Financiën v X (Case C-331/19)
Outcomes
Appeal dismissed; Skinade is not zero-rated as food.
Skinade's marketing as a skincare product, its distribution channels, and packaging outweigh its nutritional value. The Tribunal concluded that a reasonable person would not consider Skinade food.