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When is a cake a biscuit?

And when is it a cake?
According to a recent ruling by the ECJ, it is confirmed that Marks and Spencers Teacakes are indeed cakes, not biscuits, and therefore zero rated for VAT, meaning the taxman may potentially have to repay M&S £3.5 million in VAT payments from the last 20 years.

Of course, if you bought a M&S teacake within the last 20 years, it's pretty unlikely you'll be seeing any of that repayment money!

So, does that mean that Tunnocks Teacakes will be having a shot at reclaiming VAT too, now that teacakes are officially cakes?

Oh yes - Jaffa Cakes have always been cakes too, apparently (I would have loved to have had a bit of that 12 inch Jaffa Cake!!).

Comments

Meg said…
How fascinating!

I'm curious why cake is non-taxable and biscuits are taxable. They're both non-essential sweets, aren't they?

It feels rather "let them eat cake"-ish (even though I know that cake wasn't exactly cake, either).

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