Asda has called for a reduction in VAT on 100 per cent fruit juices and smoothies, and is asking for professionals to sign a petition on the Downing Street website, which has Asda’s ceo Andy Bond as lead signatory.
Under current law, consumers do not pay VAT on essential food and drinks, but smoothies and fruit juices are considered luxury items and carry a 17.5 per cent VAT increase. Asda wants to bring an end to a tax, which it believes unfairly penalises people for choosing healthier options, and is calling for the VAT to be reduced on these products to five per cent, which is the minimum allowed under EU law.
Asda will be contacting MPs, health and nutrition workers and organisations, stakeholder groups, Asda colleagues and consumers asking for their support.
Sally Hopson, marketing operations director for Asda, said: “Current VAT law makes no sense - the government charges the full rate of tax on healthy fruit juices and smoothies, while effectively encouraging people to buy cakes and frozen pizza [which are considered ‘essential’ VAT-free items] by not taxing them at all.
“This is about a common sense approach to pricing: we all know that we should be eating more fruit and vegetables, and we know that price often plays a big part in deciding which items to buy. So why should we pay a premium for making healthier choices?”
Asda has estimated that the Treasury currently takes approximately £200 million a year from charging 17.5 per cent VAT on fruit and smoothies.
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