Key facts
- The founder of a collagen company has lost a tax battle concerning a £3.6 billion tax bill.
- The First-tier Tax Tribunal ruled that the company's collagen products are not food.
- The products were marketed as liquid beauty supplements rather than food.
- The company had argued its products should be zero-rated for VAT.
- The tribunal considered how the products were marketed and why they were purchased.
The founder of a collagen company has lost a legal challenge over a £3.6 billion tax bill. The First-tier Tax Tribunal (FTT) ruled that the company's collagen-based products, marketed as anti-aging drinks, could not be classified as food and therefore are not exempt from Value Added Tax (VAT).
The company, Minerva Research Labs Ltd, had argued that its products should be zero-rated for VAT. However, the tribunal conducted a multifactorial assessment, considering how the products were marketed and the reasons consumers purchased them. The FTT concluded that these factors pointed more strongly towards the products being liquid beauty supplements rather than food for human consumption.