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HMRC internal manual

VAT Food

Excepted items: snack products: cereal-based products

The second part of excepted item 5 standard-rates savoury food products obtained by the swelling of cereals or cereal products. Cereals or cereal products are edible grains such as wheat, maize or rice and the flours and pastes made from them. This part of the item applies to:

  • savoury popcorn; and
  • savoury snack products made from cereal flour, which are expanded or aerated during the process of manufacture: these are usually made from cereal paste which is extruded and fried.

Because the law specifies swelling, these products must be distinguished from others made from cereal products which do not involve swelling. Flat savoury snacks such as tortilla chips are in this latter category and are zero-rated. The process of manufacturing biscuits is also considered not to involve swelling, so savoury biscuits are never within excepted item 5 and are zero-rated.

It is recognised that the distinction drawn above is awkward, particularly in view of the fact that products with different liabilities are competing in the same marketplace; but it is made necessary by the continual development of new products which did not exist when the law was originally drafted. It has so far proved impossible to draw up any potential redefinition of snack products which would avoid the existing problems in defining borderlines.

Products which taste sweet do not fall under this item since they are not savoury. The liability of sweet products should be considered under excepted item 2 relating to confectionery.