A dispute arose as to the classification for VAT of a brownie produced by the taxpayer. Called ‘raw choc brownies’ these were individually wrapped and intended to be as nutritionally beneficial as possible.
The taxpayer had treated the sales as standard rated but decided they should be taxed as zero-rated cakes and submitted error correction notices. HMRC refused saying the products did not possess enough characteristics of a cake to qualify.
The taxpayer appealed.
The First-tier Tribunal said: ‘The line between what is taxed as confectionery and thereby standard rated and what is taxed as a cake and zero rated is a complex and finely balanced one not least of all because the original legislation was drafted in 1972.’ It added that the ‘idiosyncrasies of the legislation’ were apparent when considering HMRC’s guidance on flapjacks in its manual VAT Food para VFOOD6200.
The judges referred also to the infamous jaffa cake...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.