Are fruit shrubs always zero rated?
It's a bit of a grey area, with HMRC making interpretations and some things being up to the taxpayer. Keith Phillips shed some light on the matter.
The law states that seeds or other means of propagation of plants providing food for human consumption is zero-rated for VAT, so no VAT is charged.
HMRC in its VAT manual states that theoretically this interpretation is not strictly correct in law as it would only cover those plants which are themselves harvested and eaten and not those which simply produce yearly crops. For example, it would cover vegetable plants such as turnips or sugar beet but not apple trees or raspberry canes. However, since the intention of the law is to keep VAT out of the food chain as far as possible, HMRC have always interpreted the zero-rate as including plants yielding or producing food for human consumption as well as plants that are food in their own right. This enables relief to apply to the full range of food-bearing plants.