Excepted items: Confectionery: Mixtures and assortments
Mixtures and assortments containing both standard-rated and zero-rated items are treated as mixed supplies for VAT purposes. As a general rule, the tax value of each part of the mixture must be worked out in order to calculate the tax due, but certain products containing only small quantities of standard-rated items may be treated as a single zero-rated supply, as explained below.
Assortments of biscuits If, in a supply of a packet or tin of assorted biscuits, the weight of standard-rated chocolate biscuits does not exceed 15% of the net weight of the whole, it may be treated as a single zero-rated supply.
Fruit and nut mixes and Bombay mix Where the weight of any standard-rated items, such as sweetened fruits, pieces of chocolate, or roasted nuts, does not exceed 25% of the whole, it may be treated as a single zero-rated supply.
Petits fours An assortment containing standard-rated chocolate biscuits or sweets, where:
- the net weight of chocolate biscuits, or the combined net weight of chocolate biscuits and sweets does not exceed 15% of the net weight of the whole; or
- the net weight of sweets, where sweets are the only standard-rated item, does not exceed 25% of the net weight of the whole, may be treated as a single zero-rated supply.
In the Smiths Foods Tribunal (1983 VATTR 21), the company manufactured packets of Big D Tropical Fruits and Nuts, containing a mixture of raisins, peanuts, coconut chips, banana chips and pineapple pieces. The banana chips and pineapple pieces contained added sugar. The added sugar comprised about 10% of the finished product by weight.
HM Customs and Excise issued a ruling that the product was confectionery and was standard- rated. The tribunal allowed the company’s appeal in part, holding that the raisins, peanuts and coconut chips qualified for zero-rating, and that the consideration should be apportioned.
As a result, HMC&E accept that fruit and nut mixtures may be wholly zero-rated if the weight of standard-rated items does not exceed 25% of the total net weight.