When is a sweet not a sweet? When it is toasted on a campfire, apparently.
Innovative Bites, a wholesaler of American sweets, has been allowed to appeal against a huge tax bill after successfully arguing at a tax tribunal that the Mega Marshmallows it distributes are not confectionery.
HM Revenue & Customs said it owed £472,928 in VAT for sales of the marshmallows, which are larger than most marshmallows, between June 2015 and June 2019. The larger than normal sized marshmallows were sold in supermarkets such as Iceland, Morrisons and Asda.
Confectionery incurs a VAT charge but if a product is used for cooking, it may be zero-rated. Innovative Bites said its product should be roasted over a campfire to make American-style “s’mores”, treats comprising
