Nutella Feast

Some time ago we wrote about McVitie’s Blissfuls. When Ferrero tried its luck in the tribunal with Nutella Biscuits, we anticipated a similar outcome.

But let it not be said that your reporter is anything but intrepid. If Blissfuls were given the investigative treatment, so must Nutella Biscuits. Here is the obligatory (amateur) photograph:

And once again there is a visible ring of chocolate around the biscuit cover. Just the same as previously.

Readers will therefore be shocked to learn that the First-tier Tribunal decided that these biscuits are properly zero-rated. Why? Because the test refers to the biscuit being wholly or partly covered in chocolate. The chocolate filling in Blissfuls stands slightly proud of the biscuit dish or case that it fills, so it is literally true that the chocolate forms part of the outer surface of the biscuit (and is, accordingly, part of its “covering”).

The Nutella filling in Nutella biscuits does not come right up to the top of the dish/case it sits within and the tribunal saw this as proof that it constitutes a simple filling, not a covering. Visibility of a filling does not make it a covering, or else biscuits such as Bourbon would be standard-rated.

So much for the decisions of the tribunals. Both of them appear sound and logical and yet …

What about the basic VAT principle of fiscal neutrality, which requires that two supplies that are similar in the eyes of the consumer should be taxed in the same way? Even assuming a certain level of knowledge in our consumer (not assisted by newspaper reporting of this subject, of which more below), these two products would appear similar to an overwhelming majority. It’s the law that’s at fault, not the tribunals.