HMRC internal manual

VAT Food

VFOOD1620 - Items benefiting from the relief: What is food?: Food and medicine: The borderline between food and medicine

In most people’s minds there is a clear distinction between food and medicine and they would not see the borderline as creating any problems in VAT terms. Mainstream medicines are relatively easy to identify; many products, aspirin for example, are clearly medicines and not foods; but there are many products which are far harder to classify.

Some products which we would consider to be food, such as special diets for invalids, may be thought of loosely as medicinal because they are used in a medical context, for example, in a hospital, or even prescribed by a doctor. Other products may be marketed for routine consumption in everyday life, but claim to have therapeutic or quasi-medicinal effects, and would therefore be seen rather as medicine than food.Definition

Medicinal products are defined in s.130 of the Medicines Act 1968 as any substance … administered to human beings for a medicinal purpose. Medicinal purpose is defined as being for:

  • treating or preventing disease;
  • diagnosing disease;
  • contraception;
  • inducing anaesthesia;
  • preventing or interfering with the normal operation of a physiological function … by way of terminating, reducing or postponing, or increasing or accelerating, the operation of that function …


Drugs and medicines are strictly controlled, and are subject to product licensing under the Medicines Act. Regulations made under the Act set requirements for the labelling of medicinal products, and these are also strictly enforced. It is therefore unlikely that you would have any difficulty in identifying mainstream medicines.

Bear in mind that, although ineligible for relief under group 1 and therefore standard-rated when supplied to a wholesaler or retail pharmacist, drugs and medicines supplied on prescription to the final customer may be allowed relief under group 12.

In most cases, products which require a product licence under the Medicines Act are also a medicine for VAT purposes. However, there are products which would be regarded by the average person as loosely medicinal which are not covered by the Medicines Act. Herbal medicines are one major category. There are also products which, while they might not be considered to be strictly medicines, would be thought of as therapeutic products rather than food. Many food supplements would probably fall within this category.

In the case of Brewhurst Health Food Supplies (LON/91/2488Z) the tribunal held that the appellant’s product, Ortisan Fruit Cubes, was a remedial preparation to remedy or to prevent constipation rather than a food, and did not fall within Group 1.

In their decision the tribunal identified a number of factors which led them to their decisions, and these may be helpful in classifying other products:

  • the promotional material accompanying the product, and the messages on the packaging, identified it as sold and bought for a specific remedial purpose;
  • the directions for consumption (before going to bed to take effect next morning) were similar to those that would be issued with a medicinal product;
  • although the product had a measurable nutritional content, this was insignificant given the amount of the product consumed at a time.