Minerva Research Labs Limited v The Commissioners for HMRC

Facts

Minerva Research Labs Ltd makes and sells a range of 18 liquid collagen products, including the Gold Collagen and Artron ranges. They are sold in small monodose bottles, in multidose cartons and in larger 300 ml "Superdose" bottles, through its website, pharmacies such as Boots, health shops and other retailers. Its founder, Mr Sanguinetti, launched Gold Collagen Pure in the UK in 2011, and Minerva accounted for VAT at the standard rate. Minerva later filed an error correction notice for periods 01/18 to 01/22. It claimed £3,847,483.06 in overdeclared output VAT on the basis that the Products were zero-rated as "food of a kind used for human consumption" under Item 1, Group 1, Schedule 8 to the Value Added Tax Act 1994. HMRC refused the claim, concluding that the Products were held out for sale mainly as a health and beauty supplement. On 30 August 2022 a statutory review upheld that decision on the ground that the drinks were taken mainly for their anti-ageing properties. Minerva appealed to the First-tier Tribunal. By then the claim had fallen to £3,637,653.93 because period 01/18 was out of time. The parties agreed that the Products were not excepted "beverages" and that the Tribunal had to apply a multi-factorial test. The only issue was whether the Products were food.