“Enjoy a glass of tasty goodness. Nesquik turns milk into an incredibly delicious drink.”
“a supply of goods or services is zero-rated by virtue of this subsection if the goods or services are of a description for the time being specified in Schedule 8 or the supply is of a description for the time being so specified.”
“GROUP 1 - FOOD The supply of anything comprised in the general items set out below, except – (a) a supply in the course of catering; and (b) a supply of anything comprised in any of the excepted items set out below, unless it is also comprised in any of the items overriding the exceptions set out below which relates to that excepted item. General items Item No 1 Food of a kind used for human consumption. Excepted items Item No 4 Other beverages (including fruit juices and bottled waters) and syrups, concentrates, essences, powders, crystals or other products for the preparation of beverages. Items overriding the exceptions Item No 6 Milk and preparations and extracts thereof. NOTES: (1) “Food” includes drink. (6) Items 4 to 6 of the items overriding the exceptions relate to item 4 of the excepted items.”
“The taste and feel of the Product when mixed with both milk (as instructed on the packet) and water (as tested by the tribunal) is that of a milky drink. That element of the analysis clearly points to the powder being a preparation or extract of milk.”
“Does the evidence satisfy the tribunal that the product is within override 6 as being a preparation or extract of milk, that when mixed with milk or water, forms a beverage ?”
“I cannot think Parliament intended to invoke such an elusive test. It is an Aristotelian question: does the product have an essence of potato?.....But the real objection is that it is just too elaborate. The statute is simply posing a kind of jury question: is it similar to a potato crisp and made of potato? The question is not capable of elaboration or complex analysis. The response to these points is that it is vital to recall why the tribunal was required in the first place to answer the question whether the goods in question are made from the potato. It was not in answer to a scientific or technical question about the composition of Regular Pringles or in response to a request for a recipe. It was for the purpose of deciding whether the goods are entitled to zero-rating. On this point, the VAT legislation uses everyday English words which ought to be interpreted in the sensible way according to their ordinary and natural meaning.”
“We decided that fiscal neutrality had to be regarded not simply as an argument, but as a fundamental, and distinct, ground of appeal that ought properly to have been pleaded at an earlier stage of the proceedings. In our view it could not at this stage fairly be considered in the absence of advance notice to HMRC.”
“The supply of anything comprised in the general items set out below, except –…….. (b) A supply of anything comprised in any of the excepted items set out below, unless it is also comprised in any of the items overriding the exceptions set out below which relates to that excepted item.”
“It might be noted that the measure which may only be taken for clearly defined purposes is the zero-rating of the supply; it is not the exception from zero-rating which needs to be so justified. Thus there is no need to discover a clearly defined social purpose to except potato crisps and the other items in para 5 (or indeed the items in the other paragraphs) of [schedule 8] from the zero-rating which would otherwise apply to them as items of food.”
"[79] Counsel for HMRC pointed out that zero-rated supplies falling within art 110 were not harmonized. She submitted that it was for the UK to determine the boundary between zero-rated supplies and standard-rated supplies in accordance with its own social policy, and that the principle of fiscal neutrality could not be relied upon to challenge the UK’s decision as to where to draw the line. She further submitted that this proposition was supported by the judgments of the CJEU in a series of cases…. [80] I accept counsel for HMRC's submission to the extent that the starting point is that it is for the UK to determine the boundary between zero-rated supplies and standard-rated supplies. I also accept that the CJEU's judgment in Rank and Isle of Wight demonstrate the principle of fiscal neutrality cannot be relied upon as depriving the UK of its discretion in this respect. It does not follow that the UK can draw the line in such a way as to discriminate between objectively similarly supplies. On the contrary, art 110 is explicit that exemptions must be in accordance with Community law. In my judgment, the European Commission v France and Marks & Spencer II make it clear that the exemption is only permissible insofar as it complies with the principle of fiscal neutrality. As in Ideal Tourisme v European Commission , the UK can distinguish between supplies which are different from the point of view of the consumer; but, as in Rank , it cannot distinguish between supplies which are the same from the point of view of the consumer."
“the case [ Finanzamt ] was concerned with “a black letter line”, setting the boundaries of an exemption to be found in the Directive itself. The exemption had to be construed strictly and fiscal neutrality principles could not flex those boundaries. Here we are not concerned with such boundaries. We are concerned with a differentiation in treatment between traders supplying similar goods within the same national exemption category. The Appellant submits that if an exemption is in principle permitted in national law by the VAT Directive it must be applied consistently with the principle of fiscal neutrality. I think that Miss Whipple’s [counsel for the appellant] submission in this respect is supported by the authorities….”
“I did not detect in the submissions for the Respondents any contention that the toasted sandwich “Subs” supplied by the Appellant could be significantly distinguished in character for present purposes, from the products that were the subject of the “zero-rate” findings of the tribunals in the cases identified in section A of the appendix. The two types of supplier were, it seems to me, “two supplies of services which are identical or similar from the point of the view of the consumer and meet the same needs of the consumer”… In that sense, there appears to have been a breach of fiscal neutrality. However, that I think could not be said of the Appellant’s meatball marinara…..”
“there is no EU law right in a taxpayer, at least none that I observe in the case law, to be treated in the same way as other taxpayers who have secured an historic windfall due to a misapplication of the law. As the CJEU put it in the Rank judgement: “64 …the principle of fiscal neutrality must be interpreted as meaning that a taxable person cannot claim reimbursement of the VAT paid on certain supplies of services in reliance on a breach of that principle, where the tax authorities of the member state concerned have, in practice, treated similar services as exempt supplies, although they were not exempt from VAT under the relevant national legislation.”
“whether the principle of fiscal neutrality must be interpreted as meaning that a difference in treatment for VAT purposes of two supplies of services which are identical or similar from the point of view of the consumer and which meet the same needs of the consumer is sufficient to establish an infringement of that principle or whether such an infringement requires in addition that the actual existence of competition between the services in question or distortion of competition because of the difference in treatment be established.”
“Having regard to the foregoing considerations, the answer to [the relevant question referred to the CJEU] is that the principle of fiscal neutrality must be interpreted as meaning that a difference in treatment for the purposes of VAT of two supplies of services which are identical or similar from the point of view of the consumer and meet the same needs of the consumer is sufficient to establish an infringement of that principle. Such an infringement thus does not require in addition that the actual existence of competition between the services in question or distortion of competition because of such difference in treatment be established.”
“account must be taken of the point of view of a typical consumer (see, by analogy,Case C-349/96 CPP[1999] ECR I-973 , paragraph 29), avoiding artificial distinctions based on insignificant differences (see, to that effect, Commission v Germany , paragraphs 22 and 23). Two supplies of services are therefore similar where they have similar characteristics and meet the same needs from the point of view of consumers, the test being whether their use is comparable, and where the differences between them do not have a significant influence on the decision of the average consumer to use one such service or the other (see, to that effect,Case C-481/98 Commission v France , paragraph 27, and, by analogy, Joined Cases C-367/93 to C-377/93 Roders and Others[1995] ECR I-2229 , paragraph 27, and Case C‑302/00 Commission v France[2002] ECR I-2055 , paragraph 23).”
“the determination whether games of chance which are taxed differently are similar, which it is for the national court to make in the light of the circumstances of the case (see, to that effect, Joined Cases C-443/04 and C-444/04 Solleveld and van den Hout-van Eijnsbergen[2006] ECR I-3617 , paragraphs 42 and 45, and Marks & Spencer , paragraph 48), must be made from the point of view of the average consumer and take account of the relevant or significant evidence liable to have a considerable influence on his decision to play one game or the other. In that regard, differences relating to the minimum and maximum stakes and prizes, the chances of winning, the formats available and the possibility of interaction between the player and the slot machine are liable to have a considerable influence on the decision of the average consumer, as the attraction of games of chance lies chiefly in the possibility of winning. In the light of the foregoing considerations, the answer to [the relevant question] is that, in order to assess whether, in the light of the principle of fiscal neutrality, two types of slot machine are similar and require the same treatment for VAT purposes it must be established whether the use of those types of machine is comparable from the point of view of the average consumer and meets the same needs of that consumer, and the matters to be taken into account in that connection are, inter alia, the minimum and maximum permitted stakes and prizes and the chances of winning.”