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VAT liability of bicarbonate of soda

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HMRC has announced a change of policy following the decision of the First-tier Tribunal in Phoenix Foods Ltd [2018] UKFTT 18 (TC).

It will now treat supplies of bicarbonate of soda as zero-rated where they are sold in small tubs as a baking ingredient, similar to those made by Phoenix Foods. HMRC will consider a range of factors to determine whether the product is sold for baking, such as how it is labelled, packaged, displayed, invoiced, advertised and marketed.

Repayment claims may be made, subject to the statutory 4-year time limit. Bicarbonate of soda sold in larger quantities, or marketed for non-culinary purposes, will remain standard-rated.

See Revenue and Customs Brief 8/2018.

Issue: 1408
Categories: News , Indirect taxes , VAT