The Court of Appeal finds in HMRC's favour, confirming that the sale of regular 'Pringles' is standard-rated for VAT purposes. Therefore, any business which stopped charging VAT on 'Pringles' on foot of an earlier High Court decision, must now resume charging VAT on all such sales. Tax must also be accounted for, for the period from when zero-rating was applied to the current date.
Proctor & Gamble manufacture 'Pringles', a savoury snack product sold in retail outlets. Although food is generally zero-rated, some items, including potato crisps and similar products made from the potato or from potato flour or from potato starch are excluded from zero-rating and charged with VAT at the standard rate. Procter & Gamble appealed to the VAT Tribunal on the grounds that a 'Pringle' was not similar to a crisp and that it was not wholly or mainly made from a potato product. The Tribunal did not accept this argument and found in favour of HMRC.
Procter & Gamble subsequently appealed to the High Court which found in their favour and decided that regular 'Pringles' were eligible for zero-rating because they were not wholly or mainly made from potato.
HMRC appealed to the Court of Appeal which has upheld the Tribunal's original decision.
Full details on how to make an adjustment for amendments to VAT arising out of the Court of Appeal decision are detailed on Brief 32/09 available here