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HMRC internal manual

VAT Food

Food: Items benefiting from the relief: what is food?: food ingredients and additives: herbs and spices

Culinary herbs and spices are zero-rated, unless they are specifically sold as medicinal products, in which case they are regarded as falling outside the meaning of food in Group 1 and standard-rated. Lists of plants currently accepted by the Department as culinary are given in VAT Notice 701/38. Traders who wish to argue that herbs not included in these lists qualify for relief must produce evidence of their use for culinary purposes. If they can do so in specific instances, zero-rating may be allowed.

Following the McCormick (UK) plc (LON/97/1193) tribunal case, mulling spices, whisky toddy mixtures, spiced cider mixtures and so on (including those supplied ready-mixed with sugar) are not regarded as products for the preparation of a beverage, and are therefore zero-rated.

McCormick (UK) plc (LON/97/1193) is the manufacturer of the Schwartz herb and spice product range. The appellant produces a prepared mixture of spices specifically for the making of mulled wine. The product is put up for sale in the characteristic yellow colour, size and shape box as it uses to sell the other Schwartz herbs and spices. The box contains six sachets (similar in size to square tea bags) each containing a specific mix of coriander seed, allspice and nutmeg.

The tribunal confirmed that:

  • the word beverages at the end of excepted item 4 does include alcoholic beverages and is not a reference only to other beverages at the beginning of the item;
  • the recipes produced at the hearing put beyond doubt that mulled wine is a beverage in its own right;
  • the spices (in whatever formulation) are the most important or even essential ingredient in the making of mulled wine; and
  • how and where in a shop or supermarket the boxes were displayed for sale was not a factor which played any part in the resolution of the dispute.

The issue came down to a short point of pure statutory construction, namely what is the proper meaning in their context to be given to the words other products for the preparation of beverages.

However, on the crucial point of the structure of Excepted item 4, the chairman was not so favourable. The words other products for the preparation of beverages should be construed eiusdem generiswith the preceding words syrups, concentrates, essences, powders, crystals: in other words, these other products must be of the same kind as syrups, concentrates and so on, namely products from which a beverage is made by reconstitution, dilution or infusion, and not just any ingredient of the finished drink.

The chairman concluded that the sachets of spices which go into mulled wine, whilst a most important ingredient, do not fulfil anything like that kind of function and are therefore zero-rated.

This decision means that mulling spices and similar preparations have, in effect, always been zero-rated.