Getting your five-a-day will cost you more soon

November 23, 2010 3:49 PM

In case you haven’t heard VAT will rise in January from 17.5% to 20%. Food is exempt from the rise - well, not all food.

Under British law consumers pay no VAT on essential foods but pay 17.5% on“luxury food items” such as ice cream, and smoothies. Yes, I did say smoothies.

The Innocent Smoothie Company, essentially fruit in a bottle, have been challenging a decision to impose VAT on their products. A court has now ruled that they aren’t exempt from VAT. In April 2007, the Innocent Smoothie Company appealed to the taxman arguing that charging them VAT was unfair because their product is a “liquefied fruit salad” rather than a “beverage.” However, yesterday the court ruled otherwise, saying that only half of the fruit in the 250ml bottle was pure fruit and arguing that the rest was fruit pulp. Who knew that fruit could be so technical?

However, the big issue is one word: hypocrisy. While the government has spent millions of pounds telling us to eat healthily and trying to make sure we get those essential five a day, they are determined to whack VAT on a supposedly healthy consumable. The government admits that Innocent Smoothies give you 2 of your 5 a day, so why tax those who buy them?

It doesn’t matter if you are a single mother on minimum wage or a multi-millionaire; everyone pays VAT at the same level. Lots of these government healthy eating drives targeted at the poorest groups in society. The least they can do is be consistent and remove VAT - which is a regressive tax, hitting the poor hardest - from products that they want people to eat.

Richard Reed, founder and CEO of Innocent, agreed saying "This ruling is definitely not in the interest of the nation's health. It's absurd that smoothies, which contain two portions of fruit and help people live more healthily, are subject to VAT at full rate when junk food like burgers, chips and doughnuts are sold tax free."

Whilst 59 MPs agreed to sign a petition asking for Innocent to be refunded its VAT, the court is adamant that its decision to uphold the VAT.

So the next time you reached for your favourite crushed drink, you may want to grab the box of doughnuts or bag of chips - if you are practising austerity that is. Because the while the fruit inside the bottle is full of tasty fruit, the tax may not taste so good.In case you haven’t heard VAT will rise in January from 17.5% to 20%. Food is exempt from the rise - well, not all food.

Under British law consumers pay no VAT on essential foods but pay 17.5% on“luxury food items” such as ice cream, and smoothies. Yes, I did say smoothies.

The Innocent Smoothie Company, essentially fruit in a bottle, have been challenging a decision to impose VAT on their products. A court has now ruled that they aren’t exempt from VAT. In April 2007, the Innocent Smoothie Company appealed to the taxman arguing that charging them VAT was unfair because their product is a “liquefied fruit salad” rather than a “beverage.” However, yesterday the court ruled otherwise, saying that only half of the fruit in the 250ml bottle was pure fruit and arguing that the rest was fruit pulp. Who knew that fruit could be so technical?

However, the big issue is one word: hypocrisy. While the government has spent millions of pounds telling us to eat healthily and trying to make sure we get those essential five a day, they are determined to whack VAT on a supposedly healthy consumable. The government admits that Innocent Smoothies give you 2 of your 5 a day, so why tax those who buy them?

It doesn’t matter if you are a single mother on minimum wage or a multi-millionaire; everyone pays VAT at the same level. Lots of these government healthy eating drives targeted at the poorest groups in society. The least they can do is be consistent and remove VAT - which is a regressive tax, hitting the poor hardest - from products that they want people to eat.

Richard Reed, founder and CEO of Innocent, agreed saying "This ruling is definitely not in the interest of the nation's health. It's absurd that smoothies, which contain two portions of fruit and help people live more healthily, are subject to VAT at full rate when junk food like burgers, chips and doughnuts are sold tax free."

Whilst 59 MPs agreed to sign a petition asking for Innocent to be refunded its VAT, the court is adamant that its decision to uphold the VAT.

So the next time you reached for your favourite crushed drink, you may want to grab the box of doughnuts or bag of chips - if you are practising austerity that is. Because the while the fruit inside the bottle is full of tasty fruit, the tax may not taste so good.

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