Minerva Research Labs VAT case shows why marketing matters

The recent Minerva Research Labs Limited v HMRC [2026] UKFTT 1320 (TC) decision is a reminder that when determining the VAT liability of food- and drink-related products, it is not always enough that something is consumable or provides nutritional value. The way a product is presented, marketed and consumed can be just as important as its ingredients.

For businesses operating in the health, wellness, and nutrition sectors, the case has implications extending well beyond collagen beauty drinks and could be relevant to a wide range of products including protein drinks, sports nutrition products and functional supplements. This is becoming particularly relevant as these types of products have become increasingly popular with consumers.

Background

Minerva Research Labs Limited sold a range of collagen-based liquid products marketed to support skin, hair, muscles and joints. The company sought to recover a substantial amount of VAT on the basis that the products should be treated as zero-rated food for human consumption. HMRC disagreed and the dispute ultimately reached the First-tier Tribunal.

The Tribunal accepted that the products contained protein, vitamins and minerals and provided nutritional value. However, it concluded that nutritional content alone was not sufficient to make a product “food” for VAT purposes.

Applying a multifactorial assessment, the Tribunal considered:

• The ingredients and nutritional characteristics
• How the products were packaged
• How they were marketed
• Why consumers purchased them
• How an ‘ordinary person’ would view the products

The Tribunal ultimately found that the products were marketed and perceived primarily as beauty and anti-ageing products rather than as food or drink and therefore should remain subject to VAT at the standard rate.

Implications for protein drinks, creatine products and electrolytes

Whilst the case specifically concerned collagen beauty drinks, the principles could be relevant across the rapidly growing functional nutrition market.

Protein drinks

Many protein drinks have historically been treated as zero-rated food where they are consumed as nutritional products or meal replacements. However, businesses should carefully consider how these products are marketed.

Questions to consider include:

• Is the product promoted primarily for nutrition or bodybuilding results?
• Is it described as a supplement, treatment or sports performance product?
• Is it consumed as a food item or as a specialist dose?

The answers could become increasingly relevant where products sit on the borderline between food and supplementation.

Creatine drinks

Creatine has become increasingly mainstream and is now commonly incorporated into ready-to-drink beverages or dissolved as a sole addition to water.

Where a beverage is marketed primarily as a performance-enhancing product, particularly if emphasis is placed on muscle recovery, training performance or supplementation, HMRC may argue that the product is not being consumed in the same way as ordinary food or drink.

The Minerva decision demonstrates that the purpose for which consumers purchase a product can be a significant factor in the VAT analysis.

Does menu customisation change the VAT position?

The case also raises an interesting question for cafés, juice bars and health-focused hospitality businesses, even gyms or wellness spaces with on-site facilities to make protein shakes or provide supplemented beverages.

Many businesses now offer beverages with optional additions such as:

• Protein powder
• Creatine
• Collagen
• Electrolyte blends
• Vitamin boosters
• Functional wellness shots

Whilst simply adding an ingredient to a drink will not automatically change its VAT treatment, businesses should be aware that product composition and marketing can have an impact on VAT liability.

For example, questions may arise where:

• A standard beverage becomes a specialist wellness product through add-ons
• The menu prominently markets health or performance benefits
• Additional ingredients form the primary reason for purchase
• The drink is presented as a treatment, recovery solution or supplement rather than refreshment

The VAT position will always depend on the facts on a case-by-case basis, but Minerva shows that businesses cannot focus solely on ingredients. How the finished product is presented to customers may be equally important.

As functional foods, sports nutrition products and wellness beverages continue to evolve, the approach to determine the VAT treatment is likely to remain an area of challenge. Businesses launching new products or reviewing existing ranges should consider VAT implications early in the development process, as seemingly minor changes in marketing or product positioning could potentially alter the VAT outcome.

Is your product’s VAT treatment right?

If you sell food, drinks or wellness products, reviewing their VAT treatment early can help you price with confidence and reduce the risk of unexpected liabilities. Gravita’s VAT specialists can assess your products, packaging and marketing, advise on new launches and support you with HMRC enquiries. Contact our VAT team to discuss your range and where a review could help.