Chocolate teacakes

[bimbo123456]

There is a question in the DTGK this week about HMRC costing �3.5millions. Something to do with chocolate teacakes. Can anyone tnlighten me what's going on please?? Ta

[pusspuss]

M&S takes biscuit: teacakes cost Treasury 3.5m
The humble chocolate teacake cost the Treasury 3.5 million today. That's the price of a VAT mistake which classified Marks & Spencer teacakes as chocolate biscuits.

Twenty years later HM Customs and Excise acknowledged the error and said teacakes are chocolate cakes after all - a crucial distinction because chocolate biscuits are subject to standard-rate VAT and chocolate cakes are zero-rated.

something to do with paying tax google hmrc and teacakes for full story

[shaneystar2]

Have a look here ..
http://www.telegraph.co.uk/money/main.jhtml?xm l=/money/2008/04/11/cnmarks111.xml
Another waste of time and money .

[bimbo123456]

thanks Shaney & Puss. God know's how much the lawyers have made over the thirteen (!!!!!) year goings on. It just makes my blood boil. Why aren't cakes VAT rated anyway. They are hardly subsistence food. What a joke. End of rant!!

[vehelpfulguy]

There was a long court case about Jaffa Cakes, deciding if they were a cake or a biscuit and if they were zero rated for VAT or not.

You can read a bit about it here

http://en.wikipedia.org/wiki/Jaffa_Cake