So Which Marshmallows Are Taxable?

A recent VAT tribunal case involving marshmallows has once again highlighted just how complex UK VAT legislation can be.

The case, Innovative Bites Ltd v HMRC, centred around whether “Mega Marshmallows” should be treated as confectionery and therefore subject to VAT at 20%.

Why Does It Matter?

Under UK VAT rules, most food products are zero-rated for VAT. However, confectionery is excluded from this relief.

The legislation defines confectionery as:

“Any item of sweetened prepared food which is normally eaten with the fingers.”

The challenge for the tribunal was deciding whether these oversized marshmallows fell into that category.

The Tribunal’s Decision

Mega Marshmallows are around 5cm in diameter and are mainly marketed for roasting over fires or making s’mores rather than being eaten straight from the packet.

In its March 2026 ruling, the First-tier Tribunal concluded that the product was more commonly eaten using non-finger methods than directly by hand.

As a result, Mega Marshmallows were found not to be confectionery for VAT purposes and can therefore be sold as zero-rated products.

So Which Marshmallows Are Taxable?

Current VAT treatment now broadly looks like this:

  • Standard marshmallows – VAT at 20%
  • Mini marshmallows sold for baking – Zero-rated
  • Mega Marshmallows – Zero-rated

It’s another example of how small product details, marketing, and intended use can significantly affect VAT treatment.

At Harris Lacey and Swain, we understand how confusing VAT rules can become for businesses selling products across different categories. If you’re unsure whether you’re applying the correct VAT rate to your products or services, our team is here to help.