Bottled Science Limited v The Commissioners for HMRC

Permission to appeal from the First-tier Tribunal is granted where the proposed grounds disclose a realistic prospect of establishing a material error of law, or another compelling reason exists. A new point may be raised at the permission stage where it is a pure point of law, the opposing party has adequate time to respond, has not suffered detrimental reliance, and can be protected in costs. Fairness and the overriding objective remain central to the exercise of discretion. The Upper Tribunal may grant permission even where a ground is raised late, if its arguable merit and limited prejudice outweigh the delay.

Bottled Science Ltd appealed to the First-tier Tribunal against HMRC’s refusal of a claim for overdeclared output tax concerning its collagen drink, Skinade. The First-tier Tribunal dismissed the appeal, deciding that the product was standard-rated rather than zero-rated food under Item 1, Group 1 of Schedule 8 to the Value Added Tax Act 1994. The First-tier Tribunal later refused permission to appeal.

The Applicant renewed its application to the Upper Tribunal and, after an oral hearing, pursued three consolidated grounds. One ground relied on the subsequent Court of Appeal decision in Innovative Bites Limited v HMRC v DuelFuel Nutrition Limited. The central questions were whether the grounds disclosed arguable material errors of law and whether the newly formulated ground should be permitted despite having been raised late.

1. Permission test. An appeal from the First-tier Tribunal lies only on a point of law. Permission should be granted where the proposed grounds disclose a realistic, rather than fanciful, prospect of success, or exceptionally where there is another compelling reason. The Upper Tribunal applied the approach stated in Smith v Cosworth Casting Processes Ltd [1997] 1 WLR 1538.

2. New point on appeal. The Upper Tribunal considered the principles in Singh v Dass [2019] EWCA Civ 360. Appellate courts should be cautious about new points. A point will generally not be admitted if it requires new evidence or would have altered the conduct of the first-instance hearing. A pure point of law may nevertheless be admitted where the opposing party has adequate time to answer it, has not acted to its detriment in reliance on the earlier omission, and can be adequately protected in costs.

3. Fairness and case management. The guidance in Revenue And Customs v Bluecrest Capital Management (UK) LLP [2025] EWCA Civ 23 recognised the public interest in the correct amount of tax being paid, subject to fairness and proper case management. The new ground was a pure point of law, HMRC had notice and minimal prejudice, and the relevant Court of Appeal guidance had only recently become available. It was therefore just and fair to permit the ground, while leaving costs protection for HMRC to the tribunal hearing the substantive appeal.

4. All three consolidated grounds disclosed realistic prospects of success and arguably material errors of law. Permission to appeal to the Upper Tribunal was granted on all three grounds. The ultimate tribunal was left to decide whether further findings or remittal would be required if Ground 1 succeeded.

• First-tier Tribunal (Tax Chamber): dismissed the Applicant’s appeal against HMRC’s decision concerning the VAT treatment of Skinade. The First-tier Tribunal refused permission to appeal on 20 March 2025.
• Upper Tribunal (Tax and Chancery Chamber): granted permission to appeal on all three consolidated grounds following an oral hearing on 18 September 2025.