Are Jaffa Cakes subject to VAT?

In 1991 the sweet treats were subject to what would become a very famous tax dispute with HMRC. HM Customs and Excise had decided that Jaffa Cakes were biscuits, therefore subject to pay VAT, unlike cakes which were classed as a staple food necessity and therefore exempt from the same tax as biscuits.

Is VAT charged on cakes?

“The significance of the borderline between cakes and biscuits is that a cake is zero-rated even if it is covered in chocolate, whereas a biscuit is standard-rated if wholly or partly covered in chocolate or some product similar in taste and appearance.”

Are Jaffa Cakes classed as biscuits?

Jaffa Cakes are also viewed as a snack, like biscuits, eaten between meals or on the go, while cake is more of a dessert enjoyed at the end of a meal or as a part of a celebration. These qualities all favour the biscuit category – however, Jaffa cakes are officially classified as cakes.

What is the VAT rate in the UK on Jaffa Cakes Pims?

and biscuits, the product is considered a cake. This means that no VAT is paid on Jaffa Cakes in the UK.

Do chocolate digestives have VAT?

We will start with the digestive biscuit! The original digestive is 0% rated for VAT as it is classed as a food item. This means that the whole manufacturing process from raw ingredients ends up with the finished biscuit. But when you add chocolate to this to make the chocolate digestive it becomes 20% rated for VAT.

Cake or biscuit? The UK's byzantine VAT system explained | IFS Zooms In

Is Jaffa Cake a biscuit HMRC?

During the court battle between Mcvitie's and Her Majesty's Customs and Excise, Mcvitie's baked a giant Jaffa Cake to prove that Jaffa cakes were really cakes and not biscuits. It was a long and costly dispute, but McVities finally tasted sweet success and Jaffa Cakes were finally recognised as chocolate covered cakes.

Do you pay VAT on biscuits or cakes?

VAT on bakery items as cakes or biscuits. Even though most traditional bakery products, such as biscuits, bread, and cakes, are zero-rated i.e. no VAT is charged, some confectionery items are standard-rated comprising: Biscuits completely or partially covered in chocolate (or a similar product in appearance and taste.

Do you pay VAT on chocolate?

VAT is also charged on other items of "sweetened and prepared food which is normally eaten with the fingers." For example: Chocolate bars. Diabetic chocolate.

Is there VAT on chocolate biscuits UK?

So what about biscuits? Well there is no VAT to pay on them unless they are wholly or partially covered in chocolate, in which case there is an extra 20% in tax.

Are Jaffa Cakes British?

Product information. McVities Jaffa Cakes are an iconic British snack that is loved by kids and fondly remembered (and still enjoyed) by adults! They consist of a sponge cake base, topped with a layer of tangy orange flavoured jelly, and rounded off with a chocolate coating.

Are Jaffa Cakes healthier than biscuits?

Dr Emil Hodzovic, a doctor at Medichecks and a sports and nutrition coach, explains: "I wouldn't necessarily describe Jaffa Cakes as a nutritional snack. They are a source of carbohydrate, predominantly sugar, with a lower proportion of fat than you might get in other biscuits or cakes, however."

Do Jaffa Cakes go hard or soft when stale?

On going stale, a Jaffa cake goes hard like a cake rather than soft like a biscuit. Jaffa cakes are presented as a snack, eaten with the fingers, whereas a cake may be more often expected to be eaten with a fork.

Are Jaffa Cakes McVitie's?

McVitie's Jaffa Cakes are the original cake in the biscuit aisle! Dark crackly chocolate on the top, light sponge on the bottom and that tangy orangey bit in the middle. Perfect for a lunchtime treat and sharing with family and friends.

Why don't you pay VAT on cakes?

Unlike sweets, cakes are considered to be a staple food and therefore zero-rated for VAT. Biscuits are also zero-rated unless they are a luxury item, which usually means they have chocolate on top.

What food is VAT exempt?

What items are exempt from VAT UK?

Why do biscuits not have VAT?

When VAT was introduced, certain goods and services were considered so essential that it was decided they should be subject to less tax, or none at all. This was done in two ways: zero rating and exemption. In the eyes of UK law, biscuits and cakes are necessities and are zero rated.

Is a brownie a cake VAT?

The brownies were therefore judged to be cakes and should be classed as zero rated for VAT.

Do crisps have VAT?

Most food is zero-rated for VAT, so you don't pay VAT, but some items are standard-rated (20% VAT). This includes catering, alcoholic drinks, confectionery, crisps and savoury snacks, hot food, sports drinks, hot takeaways, ice cream, soft drinks and mineral water.

What is the UK VAT rate for chocolate?

Full VAT on confectionary vs zero-rating on food

Under UK VAT law most food of a kind used for human consumption is zero rated. However, confectionery, including chocolates, sweets and biscuits, is liable to full VAT at 20%.

Is there VAT on toilet rolls?

Value Added Tax is currently charged by HM Treasury on the sale of toilet rolls at the rate of 20%.

Is there VAT on croissants?

Most confectionery will be given a standard VAT rating, while the rating of most baked goods will depend on whether they're sold hot and/or eaten on the premises. For example, a cold takeaway pastry (such as a croissant) would be exempt, while a hot pasty would be eligible for full VAT.

Is there VAT on a can of Coke?

Most soft drinks (excluding milk) are subject to standard-rated VAT. Surprisingly, yes! Bottled water is subject to VAT as it's not considered a basic necessity since tap water is available. Milk is generally not subject to VAT and is zero-rated for VAT purposes.

Do you pay VAT on coffee?

Coffee is treated as food for VAT purposes and is therefore zero-rated. Examples of zero-rated coffee include: instant coffee. ground coffee.

Is there VAT on bubble tea?

Hi. The sale of tea is generally a zero rated supply but but this does not include soft drinks containing tea as only one of several ingredients. Bubble teas normally start with a preperation of tea and then various other ingredients are added,for example fruit juices and other flavourings.