Taxpayers argued Sensations poppadoms were zero-rated due to gram flour, but HMRC saw them as standard-rated, like potato crisps. The tribunal agreed with HMRC, disregarding the product description. Surveys on customer perception were irrelevant. Appeal dismissed. The judge sided with HMRC, considering the product similar to potato crisps in ingredients, packaging, and marketing despite being labelled as poppadoms.
What do our advisers think about it?
The legislation on poppadoms suggests they are zero-rated due to gram flour, but in this case, crisp, advertised as poppadom, was made from potato; therefore, it was standard-rated. Hence, it’s essential to review the ingredients to ensure the correct VAT treatment.