MINERVA RESEARCH LABS LOSES £3.6M TAX BILL APPEAL

Minerva Research Labs Ltd has lost a tax tribunal challenge against a £3.6m tax bill, after arguing that its collagen supplements should be classified as food rather than medicine for VAT purposes. Judge Anne Redston, sitting in the tax chamber of the First-tier Tribunal, dismissed the company's case. The dispute centres on Gold Collagen Pure, described as the UK's top-selling collagen drink. Minerva had asked HMRC in 2022 to refund around £3.6m paid since 2018, arguing the products had been placed in the wrong tax bracket. HMRC refused the refund, and Minerva took its case to tribunal in response.

London-based entrepreneur Tony Sanguinetti founded Minerva Research Labs in 2009, saying he set out to find "a way to reverse the signs of ageing". The company makes supplements using hydrolysed marine collagen and hydrolysed bovine collagen, derived from cow hides and discarded sardine scales, and reports an annual turnover of around £16m. Its products are endorsed by model Yasmin Le Bon, TV presenter Charlotte Hawkins and former Olympic champion Dame Denise Lewis. Minerva told the tribunal its drinks provide "the perfect blend of nutritional ingredients to act as a building block for great skin, great hair, functional joints and muscles" and should therefore be zero-rated as food delivering "healthy nutrition".

Judge Redston said the central question was whether the products counted as "food of a kind used for human consumption" and so qualified for zero-rating. She ruled that the drinks are not marketed for consumption as a meal or snack, and said tasting pleasant does not mean customers buy them as food. She noted that collagen is the most abundant protein in the human body, found in connective tissue, muscle and skin, and that levels decline with age, leading to thinner skin, less supple joints and thinner hair. The tribunal's decision leaves Minerva liable for the full £3.6m bill.