VAT on collagen
VAT on collagen – Collagen powder
Collagen is a food-derived protein, and some businesses apply zero-rated VAT on collagen powder on the basis that collagen appears in HMRC’s list of potentially zero-rated food ingredients. However, VAT liability isn’t determined by ingredients alone—it can also depend on how the final product is held out for sale. This principle appears throughout VAT Notice 701/14 and HMRC’s internal food and drink manuals.
HMRC’s tests for zero-rating powdered products
HMRC manual VFOOD2020 states that powdered products can be zero-rated only if all of the following conditions apply:
- They provide meaningful nutritional content
- They contribute significantly to the diet, rather than providing functional or cosmetic benefits
- They are consumed in a manner commonly associated with food (e.g., added to recipes, smoothies, or used as part of normal dietary intake)
- They are not preparations for making a beverage
If a product fails any of these tests, with regard to VAT on collagen or VAT on supplements it is likely that HMRC would seek to argue that the supply should be treated as standard-rated.
Case law
Arthro Vite Ltd (MAN/96/1190 & 2453)
This tribunal decision concerned a high-protein powder that was mixed with water. It was zero-rated, but only because:
- It was 79% protein, making it very similar to a food protein
- It was held out as a nutritional protein food, not as a supplement
- It was not marketed for beauty, skin, joint, or cosmetic benefits
- It was consumed for nutrition, not functionality
- It had no supplement-style presentation
The tribunal noted explicitly that without such unusually high nutritional value, the outcome would likely have been different.
Bottled Science Ltd (“Skinade”) [2024] UKFTT 276 (TC)
This recent first-tier tribunal ruling concerned VAT on collagen sold as a drink called Skinade. It was held to be standard-rated, even though all ingredients were technically food-grade. The reasons included:
- It was marketed for skin and beauty benefits
- It was a flavoured collagen drink product taken as a supplement
- It did not provide meaningful nutritional value
- The average consumer would not regard it as a “food”
- Presentation clearly aligned it with the supplements market
The judge agreed with HMRC that it was a beauty product and therefore standard rated.
How the product is held out or marketed is therefore important in determining whether VAT on supplements are to be treated as a food.
Since this ruling, HMRC has applied the same reasoning broadly to VAT on collagen supplements.
This decision has been appealed by the taxpayer to the Upper-tier Tax Tribunal and is listed to be heard in October 2026.
This decision, concerning VAT on collagen, was released by the tax tribunal in September 2026 and concerned VAT on collagen supplied as a liquid in bottles. It had been accepted that VAT on collagen in tablet form was standard rated.
The Tribunal provided an overall assessment summarising the results of a multi-factorial test as follows:
(1) we place significant weight on the following:
(a) the Products nourish the body by providing between 6% and 23% of a person’s daily protein requirement, some energy, vitamins and minerals, and the purpose of food is to nourish the body;
(b) they are held out for sale as providing nourishment for bones, cartilage, muscles, joints, hair and skin, as reducing fatigue, supporting the immune system and contributing to the regulation of hormonal activity; and
(c) they are liquid in form, not tablets or powders.
(2) We place a little weight on the following:
(a) collagen in the form of bone broth and gelatine have both been used for centuries as a food; and
(b) the Products are palatable.
(1) we place significant weight on the following:
(a) the Products are held out for sale as “liquid beauty products”;
(b) they are purchased for cosmetic and anti-ageing reasons, not to provide protein or energy (there are far cheaper and easily available sources);
(c) they are not marketed to be eaten instead of a meal, or even as a snack;
(d) the use of the words “dose” and “treatment” strongly suggests a medicine, not a food; and
(e) all the Products are labelled with “Precautions” or “Warnings”, which is rarely the case with a food.
(2) We place some weight on the following:
(a) the Products are marketed as “clinically tested” and some Products are “clinically formulated”, which is not characteristic of food;
(b) some of the Products are sold as “specially formulated” for particular age groups, and all are marketed as “not suitable for under the age of 18”; neither of which is characteristic of food;
(c) pharmacies are major outlets for the products;
(d) although sold by some outlets which also sell food, the Products are not positioned alongside food products;
(e) the Products are produced as the result of the industrialised processing of huge quantities of animal and fish products, and this differs from the making of bone broth;
(f) collagen is obtained using a different process from gelatine, and the former cannot replicate the role played by jelly in cooking;
(g) the Products are sold as best taken on an empty stomach, which is not normally the case with foods; and
(h) the large Multidose bottles are similar to those used for cough mixtures.
(1) the Products are “food supplements”;
(2) they are eligible for the reduced rate of VAT in some EU countries;
(3) they can be consumed by being mixed into a smoothie or a juice; and
(4) they are sold alongside various foods.
Other considerations
HMRC’s position with regard to VAT on supplements or dietary supplements is set out in VFOOD1920:
“There are an increasing number of products on the market that are concentrated sources of
nutrients for supplementing the intake of those nutrients from the normal diet. These food
VAT on supplements occupy a grey area of VAT law as some are food, and therefore zero-rated, and
some are not.
Frequently food supplements, while not sold to relieve any specific medical condition, and
making no specific medicinal claims, are taken for therapeutic reasons – to prevent or
compensate for some real or imagined nutritional deficiency. Vitamin supplements, for
example, fall within this category. While they are not what most people would consider strictly
medicines, most would not be thought of by the average person as food.”
In Mrs S Ridal (LON/01/7038), the VAT tribunal held that a dietary supplement (NuTriVene-D) for Down’s Syndrome sufferers was a food and was zero-rated. The product was a powder that was mixed with other foodstuffs for consumption and was within the definition of food. HMRC accept that such a product, with a nutritional value, supplied and consumed in a form and manner that most people would associate with food is zero-rated. Had it been supplied in a different format, for example as tablets or capsules, we would have argued that the product was a standard-rated supplement.
In the case of Hunter Ridgeley (LON/94/2028) the VAT tribunal considered the liability of algae available in either tablet or powdered form. The tribunal could not find that the algae fell within the zero-rating provisions. The tribunal decided that, although the product had nutritional properties (9% of a person’s daily requirement of protein), the ordinary educated Englishman or broad-minded taxpayer would not consider it to be food.
HMRC state that a powdered supplement in a drinkable format may qualify for standard rating as a beverage, subject to consideration about whether it meets the beverage test.
Drinks are classed as food for VAT, but beverages are removed from zero-rating if they are classed as beverages. HMRC defines a drink as being a beverage if it is commonly consumed and characteristically taken for one or more of the following purposes:
• To increase bodily liquid levels
• To slake the thirst,
• To fortify, or
• To give pleasure
A powder which is intended to be mixed with water or another liquid can still be classed as a beverage.
If a product chooses to present a collagen powder as a protein food ingredient rather than a supplement, it may be possible to justify zero-rating of VAT on collagen powder if it is held out as a protein food ingredient although this may depend on presentation and intended use, not on collagen content alone.
Contact Solve VAT
Speak to one of our VAT specialists to discuss VAT on collagen or VAT on supplements call 0161 883 2120.
