There's no VAT on cakes, but there's 17.5% VAT on biscuits.
McVities were being charged VAT on their Jaffa Cakes, since the VAT people had classed them as a biscuit. McVities used the hard/soft argument in court to demonstrate that they were a cake, and won their case.
So the government views turning hard versus turning soft as the distinction.
I seem to remember with the Jaffa cake court case it was something to do whether the base was brought UP to the topping, or the topping was taken DOWN to the base.
I think the name Jaffa CAKE was deliberately chosen to avoid the VAT.
So I think Jaffa cakes are a biscuit sized cake.
I bet the court case was amazing, highly paid lawyers discussing the making of a Jaffa cakes.