VAT law doesn’t always follow common sense—particularly when it comes to food.

Although most food and drink items are zero-rated for VAT, there are specific exceptions. One such exception applies to “potato crisps, potato sticks, potato puffs, and similar products made from the potato, or from potato flour, or from potato starch.” That category remains subject to standard VAT at 20%.

A recent ruling by the Tax Tribunal has reinforced this point in a case involving Walkers Sensations Poppadoms, a product marketed as an alternative to traditional crisps.

The case: Walkers vs HMRC

Walkers argued that its poppadoms should be zero-rated for VAT. The product, they claimed, is fundamentally different from crisps and other potato-based snacks, primarily because it is made from a dough containing potato granules, potato starch, and gram flour—rather than from sliced or shaped potatoes.

The tribunal disagreed.

It concluded that potato granules still count as “potato” for VAT purposes, and that the product’s composition and preparation brought it within the scope of the existing exception. The judges also noted that the snacks are savoury, crunchy, and marketed in a similar fashion to crisps—sold in standard snack packaging and intended to be eaten directly, without further preparation.

Walkers had also pointed to HMRC’s longstanding view that traditional poppadoms are zero-rated. However, this argument was dismissed on the basis that traditional poppadoms are made primarily from gram flour and are typically served as part of a meal, not as a standalone snack.

The tribunal noted that branding alone is not sufficient to determine VAT treatment. Product names do not override the functional or physical characteristics of the item.

A broader pattern: pringles and product design

This is not the first time the definition of a crisp has been tested. In a separate case, HMRC initially lost a decision concerning Pringles Dippers a product designed with a scoop shape to be used with dips. Because these were not intended for immediate consumption and required an additional preparation step, the tribunal accepted they were not “crisps” in the VAT sense and could be zero-rated.

That decision remains contentious. The product has since been discontinued, and HMRC has made it clear that they do not accept the ruling as consistent with their guidance.

HMRC don’t think having to scoop up dip constitutes “requiring further preparation”

Why this matters

While these cases may seem highly specific, they highlight the complexity of VAT law—particularly in areas where product classification is open to interpretation. For food producers and retailers, these distinctions can have a substantial commercial impact. Even small changes to ingredients, packaging, or intended use can affect VAT treatment and, by extension, pricing and margins.

Businesses involved in product development or food innovation should be aware that how an item is designed, marketed, and consumed can all influence its tax classification.

If you’re uncertain about the VAT treatment of a specific product, or if your offering could be interpreted in multiple ways under HMRC’s guidance, it’s worth seeking clarity before a challenge arises.