When a Cake is a Biscuit
My line manager has had a fit of generosity by providing Jaffa Cakes in the office this afternoon.
This rekindled in my mind the now famous McVities VAT court case, which was then discussed (my pod neighbour was not aware of the case). The case was brought as to whether you should pay VAT on Jaffa Cakes or not. It essentially went do to whether a Jaffa Cake is a biscuit or a cake, thus giving us the definition of what the difference between a cake (a luxury product therefore VATable) and a biscuit (staple, no VAT). The court definition was that a cake starts soft and goes hard, but a biscuit starts hard and goes soft. A Jaffa Cake starts hard and goes soft, therefore it’s a biscuit, so no VAT!
Then the conversation went on the little weird bits of VAT law. Like you don’t pay VAT on a pack of Wheat Crunchies (Wheat is a staple), but do on you potato crisps (they’re deemed a luxury). Then you have the VAT on take out/ eat in items; hence a McDonalds milkshake to take out is cheaper than a eat in one, take out its deemed to be the same as buying a pint of milk (staple) but eat it falls within non-essential so VAT paid.
The UK isn’t the only place to have weird tax laws on food. Canada can do it too! So if you buy 1 Tim Horton’s Doughnut (Tim Hortons is the centre of so much Candaian life), its deemed taxwise the same as eating a meal out, but buy six and its deemed the same taxwise as buying your weekly groceries. Is the answer to this to buy 6 doughnuts? Probably not, but hey our 6 box to use up the last of the Canadian Dollars (little did I know I’d be back the following year then) provided us with a yummy breakfast (having eaten some waiting for the plane) on a 5am train out of Gatwick (even if we did get stares for where the heck a Tim Horton’s Doughnut box came from! (Appently you can now get Tim Horton’s in the UK, nearest one to us I know of is at Clacket Lane Services on the M25)). Some Timmy’s Hot Choc is due for purchase this summer 1 for my sister’s birthday pressie (who lived on the stuff in Gaspe) and 1 for Dr T (lover of hot choc).
6 Comments:
I believe they are now cakes, though, as by EU rules, they had to be cakes to be called "Jaffa Cakes". Hence they've been softer in recent years.
No Tom, thats nonsense.
Caz has merely got the cake/biscuit part of the story the wrong way round:
See the official website for the story from the horses mouth.
Basically Biscuits attract VAT, Cake does not, and they proved Jaffa cakes were cakes by baking a huge one. Although I think the fact Jaffa Cakes go hard when biscuits go soft may have formed part of the argument!
...contd
Jaffa cakes start soft (ish) and go hard, so they are cakes and don't attract VAT. Quite why cake is staple and biscuits are luxury we don't know.
I bow to your superior research skills, Si. Or maybe the fact I didn't do any ;)
How hard is it to put 3 words in google? Or Wikipedia
My research aint that great because its taken 3 posts to get the story straight: Plain Biscuits aren't luxury items, but put a choclate coating on and they are.
There is no such rule for cakes.
Jaffa cakes are chocolate coated. I need not finish this post as I have already provided enough info to get the message accross.
Thank you for your research Si! Mind you I wasn't corrected in the office (says a lot about my boss who said it was that Jaffa Cakes are biscuits...).
Hmm is this research something to fill your time with Si? Hope the stiches came out OK yesterday and that you're mending well!
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