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HMRC internal manual

VAT Food

Items benefiting from the relief: what is food?: food ingredients and additives: general

We accept as eligible for the zero rate any edible product supplied for incorporation in foodstuffs which:

  1. has some measurable nutritional content (even if its nutritional contribution to the finished food is tiny); and
  2. is used solely or predominantly (in the particular form in which it is supplied) in the manufacture of food; and
  3. is essential to the making of that particular food.

VFOOD2600 gives the liability of a wide range of food additives.

Products which do not meet these criteria remain standard-rated as food additives, with the exception of flavourings (natural or synthetic), which may be zero-rated even if they have no measurable nutritional content, provided they meet the criteria at 2 and 3 above.

Many of these food additives are included in food manufacture on a commercial scale but are not commonly used in domestic cooking or food preparation. Frequently they are included more to facilitate mass production and marketing than because they are essential to the nature of the final food product itself - for example, preservatives and anti-oxidants, emulsifiers and stabilisers, vitamins and artificial flavourings and colourants. These products are usually chemical compounds and rarely possess any nutritional value of their own; even where they do, they are not (except for vitamins) included in the product for that nutritional value.

In the case of McPhie & Co (Glenbervie) Ltd (EDN/91/0047) the tribunal (and subsequently the Court of Session) found that a pre-mix of sugar, salt, oil and additives for use in specialised bread production was eligible for zero-rating as food. In finding for the appellant, the tribunal established that a product could still be food even if it was not in an edible form at the time of supply, and would form only a small proportion of the final product, provided some degree of nutritional content could be demonstrated.