top of page
  • Writer's pictureInchmead

Protein bars are not cakes, rules tribunal



Nutrition bar maker, DuelFuel appealed to the tax tribunal after HMRC said its protein bars could not classified as zero-rated as they not cakes


In a case at the First Tier Tribunal (FTT), DuelFuel argued that their products were a flapjack and brownie combo, which were intended to be eaten before and after a workout to gain the nutritional benefits. However, due to the ingredients used within them and how they were intended to be consumed, HMRC said they were not cakes.


Company founder Tim Davies created the product as he told the tribunal he had spotted a gap in the market for people who need carbohydrates before a workout and protein for recovery after. The dual bars were meant to retail for £34.80 for a box of 12.


He developed the sports bars with Mike Taylor, a sports nutritionist. Davies, although he has an interest in fitness activities, predominantly worked in international sales, marketing and business development.


Through product development, Davies found that to keep the product economically viable it would have to be zero-rated for VAT treatment, taking advice from a VAT consultant who agreed with Davies they would be.

HMRC regarded them as confectionery items and, therefore would be liable for VAT, issuing the decision letter on 14 January 2022. Due to this Davies suspended the sale of the products after this as the increased price would make them impossible to sell.


Additional evidence was brought to the hearing by Davies and his barrister, Max Schofield, on the first day of the trial. This included other products which he felt were the same as his protein flapjack and brownie. Davies’ own products were over a year out of date as the production had been halted, thus leading to some of the products losing flavour.


As well as the comparable products, receipts from the purchase of the ‘plate of cakes’ were also brought to show how these were treated for VAT.


An additional witness statement was brought in by Davies on the day of the tribunal, which was not admitted due to ‘a six-month delay in serving the supplemental witness statement’. However, the plates of cakes were allowed.

Solicitor Howard Watkinson, representative of HMRC, objected to the receipts as this would be to provide additional evidence and some of the products were deemed as different to the products in question. Tribunal judge Ian Hyde decided to allow the receipts to be used as evidence.


The recipes were slightly different for each flavour of each product, but the main ingredient of the flapjack was oats, this was between 41.96-47.62% of the product, which is what is expected for a flapjack.


The brownie recipe was significantly different to that of a traditional brownie. There had to be at least 20g of protein powders in the 40g brownie, this equated to 51.87-52.78% of the ingredients for each flavour. The eggs and butter usually in brownies were replaced with glycerine, cooking oil and brown rice syrup.

Item two of Section 96(9) of the Value Added Tax 1994 (VATA) legislation states ‘confectionery, not including cakes or biscuits other than biscuits wholly or partly covered with chocolate or some product similar in taste and appearance’. This is what Davies was relying on and had to be determined. Item one also states that ‘food of a kind used for human consumption’ is exempt from VAT.


Note five of the legislation also states that ‘sweetened prepared food which is normally eaten with the fingers’ would be seen as confectionery ‘even if the relevant item does not have the characteristics of confectionery and/or bears no relation to chocolates, sweets and biscuits; drained, glace or crystallised fruits.’

The appeal was dismissed by Judge Hyde, saying: ‘Applying the multifactorial test and weighing all the relevant factors we find that the products are not cakes within the meaning of Excepted Item 2.


‘In our view they look and have the appearance of cakes but the ingredients, taste, packaging, marketing and pattern of consumption of the Products are such that an ordinary person would not consider them cakes.’


bottom of page