Requirement: Certain territories including UK and Republic of Ireland are permitted to sell children's clothing and footwear at 0% VAT (Tax), whereas all adult sizes of the same item are standard-rated.

https://www.gov.uk/government/publications/vat-notice-714-zero-rating-young-childrens-clothing-and-footwear/vat-notice-714-zero-rating-young-childrens-clothing-and-footwear

As Item VAT Group can only be specified at the Released Product level, D365 does not cater for this requirement. The only workaround would be to create a separate Product Record, which would make Procurement, Sales, Reporting and Planning more complicated.

The Item VAT Group override at Item Variant Level would also need to be considered by the POS, so the correct VAT is displayed on the receipt (sales transaction), based on the size of the item that was sold.