"I ate his liver with VAT-exempt Jaffa Cakes and a fine Chianti"

[major_clanger]

Through a discussion about VAT today I found the case of Torq Ltd v Revenue and Customs, one of a line of cases where the VAT Tribunal had to rule whether a food product was a confectionary (subject to VAT) or another sort of food (generally not subject to VAT). One of the most famous of these cases was United Biscuits, which centred on whether Jaffa Cakes were chocolate-covered biscuits (subject to VAT) or cakes (which aren't). I can't find an online version of it but Torq, which was about whether the eponymous energy bar was a flapjack or a cake, quotes at paragraph 40 what the VAT Tribunal calls the "11 tests of cake":

1. Name: This was regarded as a very minor consideration indeed.

2. Ingredients: In the present case Mr Mills said that the ingredients of the Torq Bar were sufficiently close to that of a flapjack for it to be considered as such.

3. Texture: The Tribunal in United Biscuits considered that, generally, it would expect a cake to be entirely or mainly soft and friable, not able to be snapped and not crisp. The Torq Bar was entirely or mainly soft and friable, cannot be snapped and is not crisp.

4. Size: Mr Mills said that the Torq Bar is the size of a small cake.

5. Packaging: Torq Bars are individually wrapped in foil like many cakes.

6. Marketing: Torq Bars are not sold in Supermarkets with cake but in sports shops and off the web site.

7. Manufacturing technique: Torq Bars are manufactured in a very similar way to flapjacks.

8. Consistency when stale: Like cake, Torq Bars are moist to start with and become harder and crisper when stale.

9. Presentation: Torq Bars are presented in a manner similar to many cake products.

10. Attractiveness to children: Torq Bars are designed to be attractive to adults, not children. In this way they resemble cake.

11. Core ingredients: Oats are a substantial part of the product, not in flavour but in bulk and texture when eaten. In this way the Torq Bar resembles a flapjack.

I rather like the 'Eleven Tests of Cake'*; it sounds like Twelve Labours of Hercules, but for the rest of us.

* I can't help imagining the Eleven Tests of Cake being applied by Monty Python's Spanish Inquisition.**

** Mention of the Spanish Inquisition and Cake of course bringing to mind Eddie Izzard's "Cake or Death?" routine.***

*** Which would be far scarier if performed by Izzard in character as his Hannibal role of Dr Abel Gideon, who is a blatant expy of Anthony Hopkins' depiction of Hannibal Lecter from The Silence of the Lambs.

Comments

[emmzzi]

http://www.nicecupofteaandasitdown.com/biscuits/index.php3

How to spot biscuits

They come in packets
They have two sides
You could dunk them in tea

Entry level

They come in clear cellophane wrappers
They aren't so nice that you could eat a whole packet
They are homogeneous

Mid range

Anything with a currant, or some sort of fruit in it
Twin layer affair with some sort of cream up the middle
Wrapper has pictures on it.
Some sort of USP

Luxury

Any thing with chocolate on top.
May be in a cardboard box

[nanila]

This is fantastic. I wonder if there is something similar for pie. And if a comparison has been done for British v American pies.

[major_clanger]

As I said in a response to a comment over on LJ:

In effect the position is:

1 Food is zero-rated for VAT.
1.1 Except for confectionary.
1.1.1 Unless it's cake or biscuit.
1.1.1.1 Apart from biscuits with chocolate on.

United Biscuits was about whether Jaffa Cakes fell into 1.1.1 or 1.1.1.1. Torq was about whether Torq Bars fell into 1.1 or 1.1.1.

I am now tempted to draw the Nested Venn Diagram of Food VAT Exemption.

I suspect my Piecaken would definitely count as a zero-VAT-rated cake. HMRC would probably impose a special Batshit Insanity Tax instead, however.

I think pies all count as non-VAT foodstuffs; the underlying principle was once 'normal foodstuffs' vs 'luxury treats' but that's rather been lost now. Nonetheless these cases still go to court because with VAT at 20% it makes a huge price difference whether a snack is VAT-exempt or not.

I don't know if anyone's done a transatlantic pie comparison, but nmg shares the blame for The Visible Mars Bar Project (and lots of other stuff).

[biascut.livejournal.com]

You can't leave it there! What did they conclude?

[major-clanger.livejournal.com]

Torq Bars? They were deemed to be analogous to flapjacks, and not cakes, and so were subject to VAT.

Jaffa Cakes? They were held to indeed be cakes by application of the Eleven Tests:


The product’s name was a minor consideration.
Ingredients:Cake can be made of widely differing ingredients, but Jaffa cakes were made of an egg, flour, and sugar mixture which was aerated on cooking and was the same as a traditional sponge cake. It was a thin batter rather than the thicker dough expected for a biscuit texture.
Cake would be expected to be soft and friable; biscuit would be expected to be crisp and able to be snapped. Jaffa cakes had the texture of sponge cake.
Size: Jaffa cakes were in size more like biscuits than cakes.
Packaging: Jaffa cakes were sold in packages more similar to biscuits than cakes.
Marketing: Jaffa cakes were generally displayed for sale with biscuits rather than cakes.
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. They also appeal to children, who could eat one in a few mouthfuls rather like a sweet.
The sponge part of a Jaffa cake is a substantial part of the product in terms of bulk and texture when eaten.

Apparently these points were proved with the assistance of a 12-inch giant Jaffa Cake specially baked by McVities, apparently to show that a Jaffa Cake, scaled up to more typical cake size, was clearly a cake.

This never happens in my cases.

[biascut.livejournal.com]

I knew about the Jaffa cakes, but the Torq bars were new to me. I love how random the VAT rules can be.

[nmg.livejournal.com]

Oh. And there was me thinking that a flapjack was a kind of cake...

[desperance.livejournal.com]

I'm not clear about the role of children in this narrative. Are they trying to suggest that children don't like cake? Or that adults don't like biscuits? Categorically, neither of these is true.

[a-cubed.livejournal.com]

The VAT rules are strange in that originally they were a tax on luxury and specifically not applied to necessities. That principle has been whittled away but the UK is unusual in the EU (and OECD, leaving aside the USwhich is alway weird) in not applying VAT to just about everything. EU tax harmonisation rules in fact would not allow any more exceptions to be added, though the UK can keep the ones it has (books, newspapers, childrens clothes and basic food). Indeed, the cake is VAT-exempt and biscuits aren't is one of the more bizarre ones becauseto me cakes aremore luxurious than biscuits. The children's food one is weird, too, because children's clothes are VAT-exempt while adult ones have VAT (how adult clothing is not a necessity has always escaped me).

[ivory-goddess.livejournal.com]

As I understand it, the VAT exemption for children's clothes is because children grow out of clothes, often before the clothes have worn out, whereas adults could be expected to wear clothes for much longer as they're generally not growing any more.

[nmg.livejournal.com]

In my experience, children do not grow out of clothes; they wear them out.

[a-cubed.livejournal.com]

"Adults are not growing any more." Hah, many of the adults I know are still growing. Plus, I've been shrinking, to the point where I replaced a bunch of my clothes with ones which fit properly before they were worn out.
This does, however, make some kind of sense. Particularly since second hand items in the UK also don't hav VAT added (I was horrified the first time I bought secondhand books in the US in a sales-tax state to find that they had sales tax on 2nd hand books - in the UK booksare VAT-exempt and all second hand stuff is also VAT-exempt, so sales tax on second hand books seemed excessively perverse to me).

[a-cubed.livejournal.com]

http://www.hmrc.gov.uk/manuals/vfoodmanual/vfood6260.htm is the revenue and customs page with these tests laid out. Amusingly, when I went to the page, there was a "this site uses cookies" alert box. As HMRC explain the difference is not that VAT applies to biscuits and not cakes, but that chocolate-covered (or part-covered) biscuits are considered a luxury, but that chocolate-covered cakes are not (non-chocolate covered cakes and biscuits are both considered non-luxury goods and zero-rated):
"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."
Interestingly, I can't manage to find an online version of the verdict in that case, either. Odd for a case with ongoing implications.

[major-clanger.livejournal.com]

In effect the position is:

1. Food is zero-rated for VAT.
1.1 Except for confectionary.
1.1.1 Unless it's cake or biscuit.
1.1.1.1 Apart from biscuits with chocolate on.

United Biscuits was about whether Jaffa Cakes fell into 1.1.1 or 1.1.1.1. Torq was about whether Torq Bars fell into 1.1 or 1.1.1.

I am now tempted to draw the Nested Venn Diagram of Food VAT Exemption.

[woolymonkey.livejournal.com]

Torq Bars are designed to be attractive to adults, not children. In this way they resemble cake.

What? All those days I wasted baking birthday cakes in the shape of steam engines, castles and stegosauri were all wasted! They'd have been happier with a packet of HobNobs!

[alaimacerc.livejournal.com]

Hee-hee! This is great. I disproportionately love that it's *11* tests. Calls to mind that "11th Commandment" idea. (Possibly in my mind via the admittedly obscure waypoint of the "11 Tests" to be Solar Emperor in the gameworld Glorantha, with the same implication that only 10 of them are actually supposed to be there.)

I also like the image of the 12" Cake of Jaffa, and the judge and jury salivating, tucking in napkins, and "retiring to consider the evidence".

I would similarly request that the VAT Venn Diagram be presented in the manner of a late-stage Bakeoff "showstopper" "3D" cake thereof.