Excepted items: beverages: herbal teas
Item 4 of the items overriding the exceptions zero-rates alternatives to ordinary tea in the form of maté (dried leaves of the plant Ilex Paraguayensis), herbal teas and similar products, and preparations and extracts from them. HMRC interprets this provision to relate to herbal drinks taken as beverages, to slake the thirst and so on under the Bioconcepts definition (VFOOD7520) rather than for medicinal purposes. The herbal drinks are usually sold as tea-bags prepared by infusing in hot water, but can also be sold as ready-to-drink herbal beverages.
In the case of Orchid Drinks Ltd (MAN/95/2419), the tribunal considered the liability of Norfolk Punch, a non-alcoholic bottled drink made from extracts of herbs, fruits and spices, sugar and honey. The appellant claimed that it was similar to tea, maté or herbal tea and therefore zero-rated under item no. 4 of the items overriding the exceptions.
The tribunal found it to be a dilute syrupy drink, not made by infusing leaves like ordinary tea or herbal tea, with the herbal extract only one of its ingredients and not the most significant by volume. It was not marketed or presented like tea, and was unlikely to be regarded by its drinkers as an alternative to tea. It was found to be a beverage, using the Bioconcepts criteria, not similar to tea, maté, or herbal tea, and therefore standard-rated. The appeal was dismissed.
See also the section on herbal teas, VFOOD1640.