HMRC Seeks Another Bite in ‘Mega Marshmallow’ Tax Case

<?xml encoding=”utf-8″ ?????????>

After losing twice in the protracted ‘mega marshmallows’ tax case, HM Revenue and Customs (HMRC) has announced its intention to file yet another appeal.

Last month, the Upper Tax Tribunal upheld a lower tribunal’s ruling that ‘mega marshmallows’ sold by London-based wholesaler Innovative Bites are not considered confectionery and therefore are exempt from VAT.

The case revolves around the classification of ‘mega marshmallows’ for VAT purposes. The Upper Tax Tribunal agreed with the lower tribunal’s findings that the product was marketed and sold specifically for roasting, and its large size differentiated it from standard rated smaller marshmallows.

Despite these rulings, HMRC maintains that ‘mega marshmallows’ should be classified as confectionery and subject to standard VAT. On Thursday, HMRC updated its VAT appeals, stating it is seeking permission to appeal the decision, continuing its argument against the current classification.

Glyn Edwards, VAT Director at accountancy firm MHA, expressed surprise at HMRC’s persistence: “We all thought this was the end of the giant marshmallows tax debate, but HMRC have decided to appeal again in the hope of finally persuading the tax authorities that size isn’t everything.”

Edwards also raised concerns about the public perception of this prolonged legal battle: “The general public might question whether this is really the best use of taxpayer’s money when we all know that making any sense of the VAT dividing lines on food has defeated the best legal minds for decades.”

Jilly McCullagh, director at the VAT consultancy working with Innovative Bites, echoed this sentiment, calling HMRC’s decision “disappointing.” She questioned the practicality and financial sense of continuing the appeal: “Is it really in the best interest of taxpayer’s money? Where and when does this stop?”

An HMRC spokesperson confirmed the department’s intentions: “We are seeking permission to appeal the (Upper Tribunal) decision to the Court of Appeal.”

As HMRC seeks another round in the ‘mega marshmallows’ tax case, the debate continues over the classification of the product and the use of public funds in prolonged legal disputes. With the Court of Appeal as the next potential battleground, the final resolution of this VAT issue remains uncertain.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular

Your daily news source covering investing ideas, market stocks, business, retirement tips from Wall St. to Silicon Valley.

Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2024 GroovyTrades. All Rights Reserved.

To Top