Was bicarbonate of soda ‘food of a kind used for human consumption’?

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This was a consolidated appeal comprising appeals made by the appellant against two decisions of HMRC; the first was a decision to refuse the appellants’ application to treat its supplies of bicarbonate of soda as zero rated for VAT, and the second an assessment for unpaid VAT in the amount of £291,526.00 plus interest.

Both appeals raise the same issue: whether, as the appellant contended, its supplies of bicarbonate of soda were ‘food of a kind used for human consumption’ and so zero rated, or whether, as HMRC contended, those supplies attracted VAT at the standard rate.

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The appellant acknowledged that bicarbonate of soda can have other uses, however, it is necessary to look at the supplies actually made. They were clearly intended for use in the production of food. Bicarbonate of soda is an essential ingredient in many breads and cakes. It provides the texture which is essential to the food being palatable. It is not cosmetic. 

HMRC argued that bicarbonate of soda is a generic item with multiple uses. The question of whether or not it should be regarded as ‘food of a kind used for human consumption’ should be determined by the nature of the product not how it is marketed. Bicarbonate of soda is a bulk chemical. It is added to food for a technological purpose, as a raising agent. It is not added to food for its nutritional value. 

Bicarbonate of soda is not usually consumed in the form in which it is sold. Nor, when it is used as a baking ingredient, is it recognisable in the final product of home baking. However, that is the case for a number of items that are important ingredients in food, such as flour. 

The First-tier Tribunal (FTT) decided that the supply of bicarbonate of soda by the appellant in a form that was intended for use primarily as a baking ingredient was a supply of ‘food of a kind used for human consumption’ and was zero-rated.

Phoenix Foods Limited v Revenue and Customs [2018] UKFTT 18 (TC)