Healthy vegan snack bars are no different to Kitkats, says taxman

VEGAN snack bars marketed as healthy are no different to Kitkat in the eyes of the taxman, a court case has shown.

Morrisons is locked in a legal dispute with HMRC over how to tax fruit and nut bars and veggie snacks, revealing that the tax authority treats them no differently to chocolate bars.

The supermarket is trying to reclaim almost £1.1m in VAT on the sale of snacks made by Nakd and Organix between 2014 and 2018.

Supermarkets do not have to pay VAT on most food products apart from certain exceptions such as crisps, alcohol, ice cream and confectionery. Morrisons has argued that the Nakd and Organix bars should be exempt, but HMRC disagrees. The taxman has argued Morrisons should pay the same rate of tax on the sale of Nakd and Organix as they do on chocolates like Kitkat and Mars Bar.

Nakd’s website describes its products as “healthy vegan snack bars” and its packs state the bars contain no added sugar with 100pc natural ingredients. Organix, meanwhile, sells food for toddlers, including oat bars, pouches and biscuits. Its bars carry a “no junk promise” and contain ingredients such as wholegrain oats and raisins.

A court initially found in favour of HMRC after an investigation found some Nakd bars contained more sugar than some Green & Blacks dark chocolate bars, which the court deemed “consistent with confectionery”.

Morrisons has now been granted an appeal after arguing that the tribunal had wrongly ignored factors such as the healthiness of the snacks.

A Morrisons spokesman said: “We are very pleased with the decision.”

An HMRC spokesman said: “HMRC is carefully considering the judgment.”

Nakd and Organix have been approached for comment.