JUDGES have thrown out an appeal by the taxman against a decision to wipe VAT on meal-replacement juices sold by an Old Town café.

Kris Talikowski, owner of The Core, welcomed the decision. He said: “This was not a cynical attempt to avoid paying VAT. This was a matter of principle.”

The Devizes Road business launched its fight five years ago to get the juices, sold as part of a meal replacement programme, zero VAT-rated in common with other foods.

The case ended up in court in 2018, when the First-tier Tribunal, a tax court, found in favour of The Core. The tribunal ruled that for VAT purposes the juices, made fresh from fruit and vegetables and sold as a replacement to meals, were not beverages and so were not subject to the standard rate of VAT.

HM Revenue and Customs appealed to the Upper Tribunal of the Tax and Chancery Chamber, saying the tribunal had made mistakes in the way it approached the case in determining that the juice programme drinks were not beverages.

Joanna Vicary, for the taxman, said the tribunal had attached too much weight to the way the programme was marketed as meal replacements and had treated a tax law test case as definitive.

But two judges threw out the appeal. The judges concluded that the lower court had considered all the relevant factors. In a written judgement handed down earlier this month, Mr Justice Zacaroli and Judge Timothy Herrington said: “We see no basis on which we should interfere with the decision.”

Mr Talikowski said: “One of our main arguments is that the programmes are used by our customers as meal replacements. This is not the same as buying a drink because you are thirsty or as a treat. Our juice programmes also have health benefits and are also used by several of our clients to aid their own weight loss journeys.

“There is also the fact that VAT can often disadvantage smaller traders and producers in the food and drink sector who have to pass on those costs to the consumer. They don’t have the economies of scale of much bigger brands.”

A spokeswoman for HMRC said the organisation was “carefully considering the judgement”. The taxman has until mid-December to apply for permission to appeal the decision and take the matter to the Court of Appeal.