The First-tier Tribunal Tax Chamber has again refused to stretch Group 1 food zero-rating to collagen “beauty” drinks. In Minerva Research Labs Ltd v HMRC [2026] UKFTT 1320 (TC) (decision 14 September 2026), the tribunal dismissed an error-correction claim that peaked at about £3.85 million of output VAT and still stood at roughly £3.64 million by the hearing. The sole issue was whether Minerva’s collagen products were “food of a kind used for human consumption” under Item 1, Group 1, Schedule 8 to the Value Added Tax Act 1994.
The short practical answer — the formulation Jacob LJ used in Procter & Gamble UK v HMRC [2009] EWCA Civ 407 — was no. Nutrition on the label and protein grams in the monodose bottle did not outweigh how the products were held out, bought and described. For CFOs running consumer, wellness, FMCG or PE-backed beauty portfolios, that is not a niche skincare story. It is a live control test on VAT coding, historic claims, channel packs and any board assumption that “if it is edible and nutritious, it must be zero-rated food.”
What the tribunal actually decided
Minerva produces collagen-based liquid products (including GOLDCOLLAGEN lines) sold in cartons of small monodose bottles. It had accounted for output VAT at the standard rate, then claimed repayment for periods from 01/18 to 01/22 on the basis the supplies should have been zero-rated as food. HMRC refused. The review officer held that although there were nutritional benefits, the drinks were primarily taken for anti-ageing properties. The FTT upheld HMRC.
Key framing points from the judgment:
- It was common ground the products were not out as “beverages” under the excepted items (thirst/fortify/pleasure test from Bioconcepts, approved in The Core (Swindon) Ltd v HMRC [2020] UKUT 301 (TCC)).
- Both sides accepted a multi-factorial assessment was required. Minerva did not run the alternative argument that liquid form alone made the goods “food” because Note (1) says food includes drink — the ground on which the Upper Tribunal has previously given Bottled Science permission to appeal.
- A late post-Brexit standstill argument was refused as ambush; most claim periods pre-dated exit from the single market.
- Dictionary definitions added little. The ordinary informed view, not a pure nutrients test, drives the outcome.
Claritax News has a clean case note. The National Archives judgment is the primary source you should put in the VAT file.
How the multi-factorial scales actually tipped
The tribunal put real weight on the taxpayer side first. The products nourish the body — between about 6% and 23% of daily protein requirement, plus energy, vitamins and minerals. They are held out as supporting bones, cartilage, muscles, joints, hair and skin, reducing fatigue and supporting immune and hormonal function. They are liquids, not tablets or powders (tablets had been excluded from the claim). There was some weight for historical collagen use via bone broth and gelatine, and for palatability.
Then the other side of the scales. The products are also held out as liquid beauty supplements. Minerva was positioned as an official beauty-supplement supplier to London Fashion Week. Consumer reviews and social proof showed purchase for cosmetic and anti-ageing reasons, not cheap protein. They are not marketed as a meal or snack replacement. “Dose” and “treatment” language points toward medicine, not food. Cartons carry “Precautions” or “Warnings” of the kind rarely seen on ordinary food. Clinical-testing language and beauty-channel presentation added further weight against zero-rating.
Overall assessment: the factors for zero-rating were outweighed. Paragraph 163 is blunt — the products are not “food for human consumption.” Paragraph 185 closes the purposive escape hatch: Parliament chose what sits inside Group 1; there is no overall logic or coherence that lets a tribunal zero-rate something that is not food merely because it also nourishes.
That is the CFO lesson in one line. Edible + nutritious ≠ automatic Group 1. Marketing, channel, purpose of consumption and product language can and will defeat a nutrients-led claim.
Collagen is not a first-time problem
Minerva sits in a short line of collagen decisions.
- Bottled Science Ltd v HMRC [2024] UKFTT 592 (TC) (Skinade) reached the same practical result: marine collagen drink marketed as inside-out skincare was not food. AccountingWeb summarised the case as marketing tipping the scales. Ross Martin and RSM both treat it as a warning for dietary supplements and beauty-adjacent SKUs.
- The older Arthro Vite VAT Tribunal decision was more finely balanced and leaned on high protein and dictionary language. The FTT in Minerva declined to follow that outcome as controlling, noting the different statutory analysis available after later High Court guidance (including Laddie J in Fluff) and the processed marine/bovine collagen profile of the modern monodose products.
If your group still codes beauty-collagen, “wellness shots”, or clinical monodose liquids as zero-rated food because of protein content alone, Minerva is the second public FTT loss on essentially the same commercial model. That is a pattern HMRC can put in front of a review officer without inventing new law.
The statute and HMRC map you should actually use
Keep the primary materials in the control pack, not just the case note:
- VATA 1994 Schedule 8 Group 1 — Item 1 food of a kind used for human consumption; excepted item 4 on other beverages; Note (1) that food includes drink.
- HMRC’s public food VAT guidance on GOV.UK (Food products (VAT Notice 701/14)) and the internal VAT Food manuals for officer-facing detail.
- Court of Appeal framing in Procter & Gamble and Ferrero on the ordinary meaning informed by the facts the tribunal has.
- Supreme Court discipline on zero-rating and standstill logic in News Corp UK & Ireland Ltd v HMRC [2023] UKSC 7 — strict construction of exemptions, weak purposive stretch, “chequerboard” statute reality. Minerva expressly used that line of authority when it refused to invent a nourishment-based extension.
Do not rely on “other EU countries give a reduced rate” or “customers mix it into a smoothie.” The FTT placed no weight on those points.
What every CFO must lock this quarter
1. SKU taxonomy, not brand story. Split the catalogue into clear buckets: ordinary food, standard-rated supplements/beauty, reduced-rate candidates, and genuine zero-rated food. For every borderline liquid, force a one-page multi-factorial memo: ingredients, nutrition, form, packaging language (dose/treatment/warnings), channel (beauty vs grocery), marketing claims, purpose of consumption evidence, and comparable case law (Minerva, Bottled Science, Arthro Vite).
2. Marketing is a tax control. Website hero copy, Fashion Week sponsorships, influencer scripts, “liquid beauty”, clinical claims, monodose “dose” language and precaution panels are evidence. If brand owns the copy and tax owns the VAT code, you have a broken RACI. Brand changes that move a SKU from “daily protein” to “anti-ageing treatment” can rewrite the VAT answer without anyone touching the ERP tax code.
3. Historic error-correction risk. Minerva was a multi-year repayment claim north of £3.6 million. If you have already taken a repayment or coded similar products zero-rated, map open periods, limitation, and whether HMRC can reverse via assessment or deny further ECNs. Protective advice files need the multi-factorial analysis as it stood at the time of coding — not a post-hoc brand narrative.
4. Channel and listing packs. Boots-style precaution wording, pharmacy adjacency, beauty-aisle placement and “not a substitute for a varied diet” legends all featured in the evidence. Category managers and marketplace teams should not list a product as “food” in one channel while brand sells it as a beauty treatment in another without a tax sign-off.
5. PE diligence and earn-out models. For wellness, nutricosmetic and collagen targets, treat VAT rate as a diligence line item with sample invoices, product shots, website captures and a coding memo. A 20% rate swing on a high-volume SKU is not a rounding error in EBITDA bridges or working-capital pegs. Model both standard-rated cash tax and any contingent repayment exposure.
6. Do not over-read the beverage carve-out. Not being an excepted “beverage” does not make the SKU zero-rated food. The live fight remains Item 1.
7. Governance trail. Material borderline coding belongs with tax risk / audit committee packs. SAO groups should treat systematic high-volume miscoding as a tax accounting arrangements issue — see HMRC’s SAO guidance.
Practical board sentence
If the product is sold as liquid beauty, taken for anti-ageing, labelled with doses and warnings, and not positioned as a meal or snack, Minerva says the multi-factorial test will usually land on standard-rated — even where protein and vitamins are real. Nutrition is a factor. It is not a trump card.
Bottom line
Minerva is a clean, recent FTT application of the food multi-factorial test to a commercially significant collagen range. It aligns with Bottled Science on Skinade and refuses to let bone-broth history or high protein percentages rewrite Group 1. CFOs should inventory borderline beauty/wellness liquids now, re-score them against marketing and purpose-of-consumption evidence, and lock VAT codes, historic claim files and PE diligence templates before the next ECN or HMRC review letter arrives.
Primary sources: Minerva [2026] UKFTT 1320 (TC), VATA Schedule 8, VAT Notice 701/14, Claritax, AccountingWeb on Bottled Science, Ross Martin, RSM.