A PAIR of brothers who invented a soap which they say can treat certain skin conditions claim that they have been hit with an unfair demand by the taxman.

Eric and Alby Rutter, from Trimdon Village, County Durham, launched Pharos Health Products in January - and it has proved a big success.

The brothers have been inundated by requests for their products from 21 countries across the world, and their website receives about 1,200 hits a day.

They say that their product provides a unique treatment for psoriasis, eczema, acne and other related complaints, and they have scores of testimonies from grateful customers.

But now the company, which had a turnover of just under £100,000 in the first three months of trading, has been hit with a huge demand for VAT.

The brothers say that their soap is a health product and should be exempt from VAT, but the taxman says it is a luxury item and liable for the levy.

Elder brother Eric, 54, said: "We feel it is such an obvious category.

"We were so laid back about it because we knew it was a health product, so we decided not to shove the tax on the price of the product.

"It already costs £55 for a health pack, which is a fair price for changing people's lives, but it is still a lot of money."

The company now has two factories in Fishburn, County Durham, and directly or indirectly employs 30 people.

The brothers say that they intend to apply to go before a VAT tribunal to overturn the decision and will take their appeal even higher, if necessary