Collagen is a food-derived protein, and some businesses apply zero-rated VAT to collagen powder on the basis that collagen appears in HMRC’s list of potentially zero-rateable food ingredients. However, VAT liability isn’t determined by ingredients alone—it depends on how the final product is held out for sale. This principle appears throughout VAT Notice 701/14 and HMRC’s internal food manuals.


Below we explain why our collagen powder is treated as standard-rated, with references to HMRC manuals and relevant case law. How your brand decides to treat your collagen product is ultimately your decision.

 

1. 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, it must be standard-rated.

 

2. Case law: Arthro Vite vs Skinade

Arthro Vite Ltd (MAN/96/1190 & 2453)

This tribunal 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 case concerned a collagen drink. 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 drink 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

Since this ruling, HMRC has applied the same reasoning broadly to collagen supplements.

 

3. Why our collagen powder is standard-rated

Although our collagen powder contains 93% protein, HMRC focuses on presentation and intended use, not only ingredients. Our product is:

  • presented in a supplement-style format (NRV vitamin table, daily scoop, per-day serving instructions)
  • flavoured and sweetened (PL-439 only) and taken as a drink
  • described and consumed in a way consistent with supplements, not foods
  • marketed for collagen, skin, and wellness benefits, not general nutrition
  • intended to be taken as a daily dose, not used as a food ingredient
  • accompanied by supplement-style warnings typical of regulated food supplements

These factors place it clearly within HMRC’s definition of a standard-rated food supplement or supplement beverage, not a zero-rated food product.

 

4. Summary

VAT liability is determined by how the product is held out, not simply by what it contains. Because our collagen powder is currently positioned and used as a collagen supplement drink, HMRC guidance requires it to be treated as standard-rated at 20%.


If a brand chooses to present a collagen powder as a protein food ingredient rather than a supplement, it may be possible to justify zero-rating—but this depends solely on presentation and intended use, not on collagen content alone.

We apply VAT conservatively and in accordance with HMRC’s current position, including recent tribunal findings. For advice on your own product’s VAT status, you should consult a VAT professional or HMRC directly.