In Phoenix Foods v HMRC [2018] UKFTT 18 (9 January 2018) the FTT found that bicarbonate of soda sold as a food ingredient is zero-rated (VATA 1994 Sch 8 Group 1 item 1).
Phoenix sold bicarbonate of soda to supermarkets and the issue was whether it is a ‘food of a kind used for human consumption’ so that it is zero-rated. HMRC guidance (Notice 701/14) specifically excludes bicarbonate of soda from zero-rating as a non-food additive.
The FTT observed that the question should be determined from the ‘perspective of the ordinary person in the street’ (Ferrero [1997] STC 881 and Procter & Gamble [2009] EWCA Civ 407). It added that bicarbonate of soda is an essential ingredient in some breads and cakes; although it is generally not added for its effect on taste it is critical to the textures of foods to which it is added. Furthermore ...
