"We're a UK sports nutrition brand doing about £1.5m. We sell whey powders, a pre-workout drink mix, creatine, vitamin capsules and protein bars. Our new bookkeeper says our range falls under several different VAT rules and wants a written decision per product. What are the actual rules?"
Your bookkeeper is right, and the rules are more learnable than they look. Almost every product in a supplement or sports nutrition catalogue is decided by two questions. First: is it food of a kind used for human consumption, judged the way an average person would judge it? Second: does a specific exception in HMRC's food notice catch it anyway? Supplements of a kind not normally bought and used as food are standard-rated. Sports drinks and the powders made up into them are standard-rated where the marketing does the catching. Everything else follows the food rules, which is why the same catalogue can legitimately carry two or three different treatments. On the illustrative example below, a £1.5m brand on a 55/45 standard to zero rated mix carries £137,500 of output VAT a year on its standard-rated lines, and gets about £52,500 of it back through the VAT inside platform fees and ads.
I work through catalogues like this every week, product by product, so here is the method in the order I use it. All figures are illustrative examples with synthetic planning numbers, not any client's books.
Here's the Short Version
- Start with the food test: the average person, knowing what the product is and how it is used, would call it food or drink fit for human consumption. Food is generally zero rated unless an exception says otherwise
- HMRC's food notice excludes dietary supplements "of a kind not normally purchased and used as food", which is why vitamin and mineral supplements of all kinds, and herbal capsules and tablets, are standard-rated
- The sports rules have their own section: sports drinks and the powders, syrups and concentrates for making them, tablets, and items made wholly or mainly of creatine all sit in specific standard-rated categories
- The marketing is part of the product. The sports drinks rule turns on advertising or marketing the product as designed to enhance performance, accelerate recovery or build bulk, so your copy, your creative and your influencer briefs all count
- Powders bought and used as ordinary food can keep zero rating, and a 2025 tribunal decision, Global By Nature, held that vegan protein powders were not "sports drinks" merely because their marketing mentioned performance. Each powder still needs its own product by product review
- VAT changes the price maths: the tax inside a standard-rated £30 sticker is £5, one sixth, not £6, and a zero-rated £30 keeps the whole £30. Get the classification wrong in either direction and the commercial plan is built on the wrong number
- The £90,000 registration threshold counts zero rated sales too, and once registered you can recover the VAT on platform fees, ad spend and imports that relate to your taxable sales
The Two Questions That Decide Almost Everything
Question one: is it food? HMRC's food notice, Notice 701/14, defines food of a kind used for human consumption with an average person test: if the average person, knowing what the product is and how it is used, would consider it to be food or drink fit for human consumption, it qualifies. The term includes things eaten as part of a meal or as a snack, and ingredients like flour that are not eaten by themselves. It does not usually include medicines, dietary supplements, and similar products which, although edible, are not food. Zero rating is the default for food, subject to specific exceptions, which brings the second question.
Question two: does an exception catch it? HMRC's notice lists the exceptions: confectionery, soft drinks, savoury snacks, and the whole of section 4.6, sports products. Then it adds the sentence that matters most for a supplement brand: "Dietary supplements of a kind not normally purchased and used as food are standard-rated." The list that follows is worth reading in full, because it is broader than founders expect. It covers vitamin and mineral supplements of all kinds; royal jelly products, but not ordinary foods such as honey with royal jelly added; tablets, pills and capsules containing things like wheatgerm, iron, calcium, fibre, yeast, garlic, ginseng, pollen, propolis, seaweed, evening primrose, guarana or similar herbal preparations; powders of those products other than garlic and yeast; charcoal biscuits; cod liver oil and other fish oils held out as dietary supplements; elixirs and tonics sold as dietary supplements; and malt extract with cod liver oil.
Read those two questions together and the shape of a supplement catalogue appears. A capsule is almost never "food" in the sense the notice means, so it is standard-rated. A powder can be food if it is bought and used like food, which is where the interesting arguments live.
Where A Sports Nutrition Range Actually Lands
Here is the working table I use for a sports nutrition catalogue, anchored to the notice's own sections. Every SKU gets a decision and a source note; the note is what saves you when a review letter arrives.
| Product type | Treatment | The rule behind it |
|---|---|---|
| Sports drinks, and powders, syrups, concentrates and crystals for making them | Standard rated, 20% | Section 4.6.1: drinks advertised or marketed as designed to enhance physical performance, accelerate recovery after exercise or build bulk, since 1 October 2012, including drink mixes that contain milk or milk extracts such as whey |
| Tablets | Standard rated, 20% | Section 4.6.2, with glucose, dextrose and Horlicks tablets as the stated exceptions |
| Items made wholly or mainly of creatine | Standard rated, 20% | Section 4.6.4 |
| Cereal and fruit bars, and bars in confectionery form | Standard rated, 20% | Section 4.6.3: compressed fruit bars and sweet tasting cereal bars, unless they qualify as cakes; confectionery treatment applies even to products meeting athletes' nutritional needs |
| Vitamin, mineral and herbal supplements (capsules, tablets, softgels, gummies) | Standard rated, 20% | Section 4.2: dietary supplements not normally purchased and used as food, with the full list |
| Powdered supplements with nutritional content or a significant dietary role, consumed like food | Can be zero rated, if they qualify as food and no exception applies | The food test in section 2.3 plus HMRC's internal VFOOD manual; review composition, use and marketing per product |
| Slimmers' meal replacements, including drinks | Zero rated, unless in confectionery form | Section 4.5 |
| Foods for people made weak or disabled by illness or injury | Can be zero rated on the usual rules if they meet nutritional needs | Section 4.3: can be zero rated if designed to meet nutritional needs rather than treat a medical condition, subject to the normal rules and exceptions |
Two lines in that table deserve a longer look, because they are where the money and the arguments are.
The drink mixes. The sports drinks rule is a marketing rule as much as a product rule. A powder is caught when the product is a sports drink or similar drink, advertised or marketed as designed to enhance physical performance, accelerate recovery after exercise or build bulk, and the notice expressly includes drink mixes containing whey. That sentence alone decides a large slice of the category. But the rule is not a trap for every powder with an energetic label. In the Global By Nature tribunal decision in 2025, vegan protein powders were held not to be "sports drinks" at all, so the exception never bit, and their zero rating stood; HMRC was refused permission to appeal in early 2026. The lesson is not "powders are safe" and not "drinks are caught": it is that composition, use and marketing are read together, per product, and the same formula repositioned as a recovery drink can land differently from how it lands as a general food.
The powders bought as food. Where a powder has nutritional content or fills a significant dietary role, is consumed in a way associated with food, and is not caught by another exception, HMRC's internal guidance accepts zero rating. That is the path that keeps a protein powder priced like groceries. It is a product by product argument with the notice and the VFOOD manual as your documents, and performance, recovery or bulk claims increase the risk, though Global By Nature confirms that marketing alone does not make every powder a sports drink.
The Marketing Is Part Of The Product
Founders treat VAT as a label on the jar. The notice says otherwise, twice: the sports drinks test runs on how the product is "advertised or marketed", and the powder analysis turns on how it is bought and used. That makes your copy, your packaging claims, your social content and your published creator content all evidence of how the product is marketed, and part of your VAT position.
Keep one voice: if your VAT decision treats a powder as a food product, review any performance, recovery or bulk claims against its composition and normal use before they go live. Your copy, packaging, social content and published creator content are all evidence of how the product is advertised or marketed, so brief the agency with the classification in mind. And if a product's positioning genuinely changes, treat that as a VAT event, not a marketing refresh. Document the reasoning per product while it is fresh, because reconstructing why you classified something two years ago is the expensive version of this exercise. If you need the wider picture of how VAT touches a supplement brand on the platforms, our post on VAT traps for supplement brands on TikTok Shop walks the payout side.
What The Classification Means For Prices And Cash
Consumer prices are VAT inclusive, so the tax inside a standard-rated price is one sixth of the sticker. On a £30 product that is £5, and you keep £25. The common error is taking 20% of the sticker, which gives £6 and overstates the tax by £1 in every £30; that pound was margin. A zero-rated £30 keeps all £30. Take a typical subscription box with one standard-rated and one zero-rated product in it, and the apportionment of the single price between them becomes a real decision with a real number attached.
Now scale it. Here is the illustrative £1.5m brand from the opening, 55% standard rated and 45% zero rated, running through a platform-heavy channel.
| The year, illustrative example | Amount | VAT |
|---|---|---|
| Standard rated customer takings | £825,000 | £137,500 due (one sixth) |
| Zero rated customer takings | £675,000 | Nil |
| Platform commission at 9% of the customer takings, fee inclusive of VAT | £135,000 | £22,500 recoverable |
| Ad spend, VAT inclusive | £180,000 | £30,000 recoverable |
| Net position before import VAT and other costs | £1.5m of takings | About £85,000 due |
Read the bottom line like a founder: the standard-rated slice of the catalogue carries six figures of VAT a year that the zero-rated slice does not, and the fee and ad stack hands back about £52,500 of it, provided the invoices are collected and the returns are done properly. If your bookkeeping posts net payouts as revenue and the fee invoices stay in a portal, neither fact is visible, and the reclaim quietly never happens.
The Registration And Recovery Layer
Three mechanics complete the picture for a supplement or sports nutrition brand.
The threshold counts zero rated sales. The £90,000 VAT registration threshold applies to taxable turnover, and zero rated sales are taxable turnover. Exempt and outside-scope supplies generally do not count, but zero rated ones do. A brand selling nothing but zero-rated powders still has to watch the rolling twelve month total, and a viral month can tip it. Cross it and the two clocks from HMRC's registration rules apply: register within 30 days of the end of the month in which the rolling total goes over, with an effective date of the first day of the second month after; or, if you expect to exceed £90,000 in the next 30 days alone, register by the end of that period, with an effective date of the day you formed that expectation. If almost everything you sell is zero rated, HMRC can agree an exemption from registration instead, but you give up input VAT recovery, so run both numbers. The free VAT registration checker runs the rolling total for you, marketplace sales included.
The recovery list is longer than most brands think. Zero rated supplies are taxable supplies, so if you are registered, input VAT on costs that relate to your taxable business is recoverable on the normal rules: the VAT inside platform commissions and fees, ad spend, fulfilment and 3PL charges, packaging, software and professional fees. On imports, postponed VAT accounting lets you declare and recover import VAT on the same return without paying it at the border, and the notice's point that import VAT follows the UK liability of the goods means standard-rated stock carries 20% at import while zero-rated stock carries none.
And if something has been classified wrongly, fix it properly. HMRC's error correction rules allow net errors of £10,000 or less on the next return. Net errors over £10,000 and up to £50,000 can also go on the next return where they do not exceed 1% of box 6 for the return period in which you discover them. Errors above those limits, and deliberate errors of any size, need a separate notification. The normal correction window is four years, but that limit does not apply to deliberate errors. Late paid VAT runs interest from the original due date at Bank Rate plus four percentage points, so the arithmetic of delay is never in your favour.
FAQ
Are protein powders zero rated for VAT?
Some are, some are not, and the difference is decided product by product. A powder with nutritional content or a significant dietary role, consumed in a way associated with food and not caught by an exception, can be zero rated. But drink mixes marketed as designed to enhance performance, accelerate recovery or build bulk are caught by the sports drinks rule, which expressly covers mixes containing whey. The Global By Nature tribunal decision in 2025 shows a powder is not caught merely because its marketing mentions performance, so composition, use and marketing all matter. Get a written decision per product.
Are sports nutrition products standard rated?
Many are, but not as a category. HMRC's food notice makes sports drinks and their drink mixes, sports tablets, and items made wholly or mainly of creatine standard-rated, and treats confectionery-form bars as standard-rated even when they meet athletes' nutritional needs. Powders that qualify as food can keep zero rating. There is no blanket rule either way, which is why the catalogue review matters.
Do zero-rated sales count towards the VAT registration threshold?
Yes. The £90,000 threshold is measured on taxable turnover, and zero rated supplies are taxable turnover even though the VAT rate on them is nil. If you cross the line you must register within the deadlines, and you can then recover VAT on related costs like platform fees, ads and imports. If almost everything you sell is zero rated, an exemption from registration may be available on application, but it gives up that recovery.
The Bottom Line
VAT for a supplements or sports nutrition brand is not one rule, it is a product by product review with two questions and one marketing test. Is it food? Does an exception catch it? And does the way you sell it change the answer? Build the catalogue decision list, keep a source note per SKU, keep your marketing consistent with the decision, and watch the threshold whether or not your sales are zero rated. Then the classification stops being a surprise and becomes a design choice you make with the price and the margin in view. The marketplace layer sits on top of all of it, and we can map that with you too.
If you want your range classified properly, with the reasoning documented line by line, that is the work we do every week for UK supplement and sports nutrition brands between £1m and £20m. We are specialist social commerce accountants, we read the notices so you do not have to, and we will tell you plainly where your VAT risk sits. Book a call and bring your product list.