Juice bar wins five-year HMRC court battle

By Ben Carey on 3 December, 2020

Small business owner Kris Talikowski has won a landmark battle with HMRC over the VAT charged on his company’s juice cleanse programmes.

Kris, owner of Swindon business The Core, argued that the business should not attract VAT, as is the case with other food products. 

HMRC had stated his juice programmes were a collection of beverages and should be standard rated. Kris pointed out that they were actually ‘liquid food’ comprised purely of juiced and blended fruits and vegetables, which therefore should not attract VAT.

Kris said, “This was not a cynical attempt to avoid paying VAT. This was a matter of principle. One of our main arguments is that the programmes are used by our customers as meal replacements. This is not the same as buying a drink because you are thirsty or as a treat. Our juice programmes also have health benefits and are also used by several of our clients to aid their own weight loss journeys.

“There is also the fact that VAT can often disadvantage smaller traders and producers in the food and drink sector who have to pass on those costs to the consumer. They don’t have the economies of scale of much bigger brands.”

Supported by accountants Grant Thornton and Barrister Max Schofield, Kris has been on a five-year journey to get the final ruling which came recently.

The Core, named as the appellant, initially won the case in 2018 at a First Tier Tax Tribunal. HMRC appealed against the decision which was dismissed.  It then appealed again, this time to the Upper Tier Tribunal.  At this stage the majority of the appeal was refused apart from one ground which was to argue the weighting of how the First Tier made their decision. This meant the case had to go for a final hearing. 

The final appeal took place last month and was dismissed by Justice Zacaroli and Judge Timothy Herrington, meaning The Core had won the case. 

Kris added, “This is a great result that means our health programmes comprised entirely of fruits and veg can be accessible to more people.  We have a system in the UK that favours large mass market food producers that generate cheap foods that are contributing to an obesity crisis across the UK.  

“The government have tried to promote ‘5-a-day’ and their Change4Life programmes as ways to change behaviours.  I see the way forward as focussing our collective attention on boosting intake of fruit and veg to control weight and improve recovery of medical conditions and diseases.”

Daniel Rice from Grant Thornton said, “I’ve been working with Kris and Max on this case for the duration and we are delighted with the outcome. It’s a good opportunity to finally clarify the law on juice cleanse programmes.”

To find out more about The Core go to www.thecorejuicery.com 

Pictured: Kris Talikowski.