We urge all people involved in the sports nutrition industry to write urgently to HMRC. See below for a template message which only requires you to fill in your name where suggested. Feel free to copy and paste this information and, once you individualise it, to send to HMRC at the address or email below:
David Roberts
HMRC
VAT Projects Team
3C/10, 100 Parliament Street, London, SW1A 2BQ
david.roberts4@hmrc.gsi.gov.uk
Needless to say, the more responses objecting to this proposal HMRC get, the greater impact that our campaign will have.
Your Name Here
Response to HMRC Consultation
I would like to thank Her Majesty’s Revenue and Customs (HMRC) for the opportunity to respond to this consultation on the proposed changes to VAT applied on sports nutrition products.
I would also like to thank HMRC for extending the consultation period to eight weeks, which we consider more appropriate given the scale of these proposed changes.
Specific questions on proposed new sports nutrition legislation
Q5 – Does the proposed legislation meet its objective of ensuring that sports nutrition drinks are taxed consistently with other sports drinks at the standard rate of VAT? If not, why not and what changes are needed?
No. Not only does this legislation not meet the objective of ensuring that sports nutrition drinks are taxed consistently, it threatens to introduce a much greater level of confusion and inconsistency into the VAT system.
There is a distinct and considerable lack of understanding regarding the sports nutrition industry within HMRC. VAT is currently applicable on sports nutrition drinks, or Ready-to-Drink (RTD) products. These are drinks that typically cost around £1 and are enjoyed in a non-athletic setting by a wide range of consumers.
Sports nutrition products that will have VAT imposed on them under these proposals are, however, very different. In the first instance, they are not sports nutrition drinks, as much official correspondence on this subject refers to them. They are food products and should be zero-rated, as other foods are.
They are also typically premium products, retailing at around £40 to £45. They are consumed by sportspeople like me, athletes of all abilities – both amateur and professional – who wish to boost their sporting performance and aid recovery. These products highlight my commitment to my sport and sometimes I can spend (please insert a figure here) a month on sports nutrition products, equating to a considerable increase per month if VAT is imposed.
(You may wish to include some example of products that you use which are in this price range and will be affected by the imposition of VAT – emphasise the impact that a 20% rise will have on your monthly spend and how you may be forced to cut down on use of affected products.)
This illustrates that the products VAT is currently imposed on are very different to those HMRC wishes to impose VAT upon. Doing this would not impose a “consistent” tax but would instead significantly raise the price of very different products used by many different people to help them live healthier and more active lives.
New Anomalies
Furthermore, a considerable number of new anomalies would result from this tax change. This undermines HMRC’s argument that the tax change is to address these anomalies; instead, the imposition of VAT on these products will create further anomalies and inevitably lead to HMRC using greater amounts of taxpayer’s money to fight legal action.
The vast majority of products that would have VAT imposed upon them by this VAT change contain whey protein as the key ingredient. Whey protein is essentially milk. If HMRC are to tax products based on milk for the sole reason that they are products for sportspeople and marketed as such then I expect consistency.
Many milkshakes, which are currently zero-rated, are marketed as “recovery” drinks: one major confectionary manufacturer, for example, is currently promoting a Refuel product as “full of milk goodness…to help muscles recover faster”.
The latest advertising campaign for milk, co-ordinated by the UK Dairy Council, features a picture of David Beckham and the comment “the protein in milk helps build muscles”.
These two products are clearly and unambiguously being marketed as sports nutrition products, which are based on milk as an active ingredient. There is no fundamental difference between them and the sports nutrition products that HMRC are seeking to tax.
Some businesses will sell the key ingredient of affected sports nutrition products, whey protein, as a generic product in plain packaging. As this would not be marketed as a sports nutrition product but as a foodstuff it would avoid the 20% tax – creating yet another anomaly. Such products would not display information about dosage or safe use. This tax hike will lead to lower standards of consumer safety for UK sportspeople such as myself; would favour new, opportunist web-based sales to the detriment of existing, responsible businesses; and would see no VAT revenue to the Treasury. (You may wish to say here that you are considering such a move.)
By imposing VAT on sports nutrition products, HMRC is creating a large number of new anomalies in the tax code and will face a considerable amount of new litigation, as sports nutrition companies seek legal rulings on what milk based products constitute sports nutrition and which do not; reduce consumer protection as generic products are sold to people such as myself; and drive sales to the internet at the expense of businesses based here in the UK.
Q6 – We have considered impacts on businesses and consumers of the changes to sports nutrition drinks and these are set out in the Table of Impacts in Annex B. We would welcome comment on these impacts (including any specific impacts on small businesses) and would particularly welcome details of any impacts we have not identified.
It is my view that HMRC have not properly considered the impact on businesses and consumers such as myself of the changes to the pricing of sports nutrition drinks.
HMRC’s view that this change will lead to a “small increase” in the price of sports nutrition drinks is wrong. Adding VAT of 20% to a sports nutrition product will lead to a price rise of 20%. As noted above, these products that already retail at between £40 and £45, meaning that a 20% rise will take them over the psychologically important £50 mark. In an uncertain economic climate this is bound to have a noticeable and unwelcome impact on my ability to purchase sports nutrition products. This is particularly the case when, as noted above, there is a range of non-premium products offering some benefits to sportspeople and which are zero-rated for VAT.
(The best way to highlight the impact that this price rise will have is to draw on your own experience. A short sentence highlighting the fact that you will undoubtedly be forced to cut down your spending on affected products, particularly given the current economic circumstances, will suffice – note that this will have an impact on the places you purchase these products from, particularly if you buy them from your local gym or other small retailer, as well as the manufacturer.)
It will not just be manufacturers, distributors and dedicated retailers affected by this tax change – also affected will be the small gyms and specialist retailers around the country that rely on revenue from these products. The last thing our struggling high streets and town centres need now is yet more business closures.
HMRC estimate that the cost per business of this VAT change will be ”around £40 on average”. I consider this a vast underestimate that fails to take into account the extreme price-sensitivity of products in the highly competitive sports nutrition market.
I fully recognise the need for the Government to tackle the UK’s economic deficit and understand that greater income from taxation must play some part in this. A much better way of tackling this deficit, however, is through greater economic growth and such growth must come from the UK’s small and medium sized enterprises.
Imposing this VAT rise will severely hit the growth prospects of the UK sports nutrition sector, a thriving, Europe-leading slice of the economy. As noted, it will also imperil employment, not just within the part of the sector that manufactures, distributes and directly sells sports nutrition products but also within the many small businesses that are related to the sector, such as independent gyms.
I am surprised that the HMRC’s impact assessment failed to take account of any of these points and disappointed that HMRC failed to contact any sports nutrition company in the sector when drawing up this assessment.





















