United Biscuits Ltd v Commissioners of Customs and Excise

Facts

The appellant, United Biscuits (UK) Ltd, manufactures the snack food sold under the generic name "Hula Hoops". The variety in issue was marketed as "Shake 2 Flava": conventional Hula Hoops, rings of which the principal ingredient is potato and which are already flavoured — the example before the tribunal was a chicken flavour — packed in foil bags together with a sachet of further flavouring, in the example a barbecue seasoning. The consumer thus has the choice of eating the rings with the original flavouring alone, or of adding the seasoning and shaking the bag so as to change the taste. The appellant accepted that, without the additional flavouring, Hula Hoops fall within Excepted Item 5 to general Item 1 of Group 1 of Schedule 8 to the Value Added Tax Act 1994, which excludes from zero-rating potato crisps, potato sticks and potato puffs "when packaged for human consumption without further preparation", and are accordingly standard-rated. It contended, however, that the addition of the seasoning by the consumer amounted to "further preparation", with the consequence that the product fell outside the Excepted Item and was eligible for zero-rating. By a letter of 9 December 2003 the Commissioners of Customs and Excise decided that the product was standard-rated, and it is against that decision that the appeal was brought.