It matters whether Jaffa Cakes are a cake or a biscuit because for VAT purposes cakes are zero rated, but chocolate covered biscuits are subject to VAT at the standard rate (20%).
The position is more complicated for flapjacks. Traditional flapjacks are viewed as similar to cakes, and zero rated. However, flapjack bars have previously been found to be âconfectioneryâ for VAT purposes.
It all came to a head again in the recent case of Duelfuel Nutrition Limited vs HMRC, where the company said its flapjack, cake bar, and brownie should be treated as zero rated for VAT purposes.
To decide the Tribunal did an actual taste test! And, Duelfuelâs goods went up against McVitieâs chocolate HobNobs, Mr Kiplingâs chocolate slices, and Kelloggâs Nutri-Grain bars.
The judge ruled Duelfuelâs goods had the appearance of cakes, but given âthe ingredients, taste, packaging, marketing and pattern of consumptionâ, an ordinary person would not consider them to be a cake. So, the court found that they were âconfectioneryâ and Duelfuel was unsuccessful.
It seems the real standard is would you serve them to guests as a treat with afternoon tea!
