I have sympathies with both sides on this, but the tribunal judge had far more sympathy with HMRC’s arguments and concluded the bar should be standard rated. A bar of chocolate must, therefore, be standard rated when held out for sale as confectionery but may be zero rated when held out for sale overtly as cooking chocolate (ie an ingredient). I’m not going to delve into the cake/ biscuit argument. The facts

However, if Kinnerton Confectionery had created a subsidiary company to develop and manufacture the product, and called it Kinnerton Bakery, perhaps zero rating would have been secured? But this may be teetering on the brink of tax avoidance these days… HMRC challenged the VAT treatment, essentially on the basis that the product wasn’t overtly marketed or sold as a cooking ingredient, and was often sold alongside items of confectionery – merely stating that it was suitable for use in cooking didn’t equate to cooking being the primary purpose of the product. The outcomeThis all suggests that, with a few tweaks to the facts, this case could easily have gone the other way – as any allergen-free chocolate bar that is genuinely held out for sale as cooking chocolate should be zero rated. Analysis HMRC and the tribunal also paid a surprising amount of attention to the fact Kinnerton’s company name is Kinnerton Confectionery Ltd. Having “Confectionery” in the title was suggested to mean the product was more likely to be confectionery, and more likely to be seen by consumers as confectionery. I personally give consumers slightly more credit than this.

The judge also commented that an advert for the product “did not say that it was 'cooking chocolate' but that it was 'ideal for cooking'”. VAT law does not prevent Kinnerton (or any other manufacturer) from making an allergen-free chocolate and holding it out for sale as cooking chocolate, but that is not what has happened in this case.” Daniel Rice chews over another tasty first tier tribunal ruling on the intricacies of VAT law for food products. This time it’s chocolate - the pure, dark variety used for cooking.Is that a genuine reason to cost a business over a quarter of a million pounds, or is it just pedantic semantics? Kinnerton Confectionery Ltd ( TC06548) sells a range of products – predominantly confectionery and chocolate products aimed at children, most of which are standard rated as, funnily enough, confectionery. But then Kinnerton diversified, ever so slightly, and created an “allergen-free chocolate bar” that is “ideal for cakes and desserts”. The law For those with more than a passing interest in VAT food law (of whom I know there are at least three), you will know the chocolate-related rules: