HM Revenue and Customs Brief 32/09
Submit Articles Back to Articles
Issued 29 May 2009
VAT: Liability of regular 'Pringles' (a savoury snack
product): the decision of the Court of Appeal in respect of Procter
& Gamble UK
The Court of Appeal issued its decision in this case on 20 May
2009. The judgment is in HM Revenue & Customs (HMRC) favour and
confirms that the sale of regular ‘Pringles’ is standard-rated for VAT.
Proctor & Gamble manufacture 'Pringles’, a savoury
snack product, commonly sold in retail outlets.
Although food is generally zero-rated, some items, including
potato crisps and similar products made from the potato or from potato
flour or from potato starch are excluded from zero-rating and charged
with VAT at the standard rate.
Procter & Gamble appealed to the VAT Tribunal on the
grounds that a ‘Pringle’ was not similar to a crisp and that it was not
wholly or mainly made from a potato product. The Tribunal did not
accept this argument and found in favour of HMRC.
Procter & Gamble subsequently appealed to the High
Court which found in their favour and decided that regular ‘Pringles’
were eligible for zero-rating because they were not wholly or mainly
made from potato.
HMRC appealed to the Court of Appeal which has upheld the
Tribunal’s original decision.
Implications of this judgment
The judgment confirms HMRC’s view that ‘Pringles’ are
standard-rated for VAT and always have been.
Therefore, any business that chose to stop charging VAT on
‘Pringles’ as a result of the High Court decision must now resume
charging VAT on all such sales. Tax must also be accounted for, for the
period from when zero-rating was applied to the current date.
An adjustment may be made to your current VAT return, but the
value of the errors must not exceed the greater of either £10,000 or 1
per cent of the box 6 figure on the VAT return for the VAT return
period of discovery, subject to an upper limit of £50,000.
Where the errors exceed the limits set out above, a written
notification detailing the error should be submitted to HMRC (in these
cases the errors must not be corrected through the use of VAT returns).
Details of where to send your notification can be obtained
from update 2 to VAT Notice 700/45 - How to correct VAT errors and make
adjustments or claims from the HM Revenue & Customs National
Advice Service on Tel 0845 010 9000.
Any claims for overpaid VAT lodged as a result of the High
Court decision will now be rejected.
If you have any queries about this please contact the
National Advice Service.
About the Author
© Crown Copyright 2009.
A licence is need to reproduce this
article and has been republished for educational / informational
purposes only. Article reproduced by permission of HM Revenue &
Customs under the terms of a Click-Use Licence. Tax briefs are updated
regularly and may be out of date at time of reading.
Follow us @Scopulus_News
Article Published/Sorted/Amended on Scopulus 2009-06-01 07:57:08 in Tax Articles