After several years winding its way through the courts, the long‑running VAT dispute over giant marshmallows finally reached a (mostly) definitive conclusion earlier this week.

https://caselaw.nationalarchives.gov.uk/ukftt/tc/2026/500

After a trip through the Tribunals starting in 2022, the argument found its way to the Court of Appeal. The Court sent this case all the way back to the First-tier Tribunal because it hadn’t asked itself the right question at the outset.

The original tribunal had decided that giant marshmallows were not confectionery based on packaging, marketing and where the product was placed in supermarket aisles. But the Court of Appeal decided that any product which met the criteria in a Note to the VAT legislation on Food was to be treated as confectionery irrespective of those other factors. That note treats “sweetened prepared food which is normally eaten with the fingers” as standard-rated confectionery.

The original Tribunal had failed to decide whether giant marshmallows were ‘normally eaten with the fingers’.

The latest Tribunal considered 4 ways of eating them:

1) Roasted on a skewer / stick (collectively skewer) and eaten from the skewer (Way A).

(2) Roasted on a skewer, taken off the skewer after it has sufficiently cooled and eaten with the fingers (Way B).

(3) Roasted on a skewer, inserted in the middle of two biscuits with a piece of chocolate and eaten as a s’more (Way C).

(4) Eaten straight from the pack with the fingers (Way D).

The Tribunal found that Way A and Way C did not involve eating with the fingers. Way C because the marshmallow itself wasn’t eaten with the fingers – it became an ingredient of something else.

The Tribunal then found that Way A was more likely than Way B; and Way C more likely than Way D.

There’s even some algebra in the judgement: A > B and C > D therefore (A + C) > (B + D).

Conclusion – giant marshmallows are not normally eaten with the fingers!

HMRC might appeal again because the Tribunal didn’t have lots of evidence about how consumers actually eat these marshmallows, so HMRC might argue that the taxpayer has not properly discharged the burden of proof.

Glyn Edwards, VAT director at MHA, commented: “This case shows that VAT law can turn even the humble marshmallow into a legal conundrum. When tax outcomes depend on whether something is eaten from a stick, between biscuits or straight from the bag, you know you’ve entered uniquely British territory. It’s not every day that roasting techniques and campfire habits decide a VAT rate, but for now at least, the giant marshmallow has emerged lightly toasted and zero‑rated.”