Journal :: Are M&S Chocolate Covered Teacakes Biscuits or Cakes?

Published: September 6, 2005
Author: Graham Dragon
Category: Tax
Permalink: Are M&S Chocolate Covered Teacakes Biscuits or Cakes?

I am sure you have a burning desire to know whether the Marks & Spencer chocolate covered teacakes you have for your afternoon tea are biscuits or cakes. It is, after all, a burning issue!

You were not aware this was a vital matter, overshadowing the pensions crisis, endowment red warning letters, and the extension of the powers of the FSA to demand the arrest of errant IFAs? Surely you know that Marks & Spencer have been in hot dispute with the then Customs & Excise (now HMRC) over the definition of their teacakes since 1994? No? Or that at the end of July this year the House of Lords decided that this was such an important and far-reaching matter that it simply had to be resolved by the European Court of Justice? No doubt they reached this weighty decision whilst munching said teacakes during their mid afternoon break.

To be precise, what the ECJ is being asked to determine is not really the definition of a biscuit or cake, but whether or not Marks & Spencer is entitled to make a profit by obtaining a full refund of VAT which had mostly been paid by their unfortunate customers rather than themselves. HMRC call this ?unjust enrichment?, and clearly do not believe Marks & Spencer are entitled to this. I have to admit I see some merit in this position, although it is perhaps a pity that the real victims, the customers, cannot get back their overpaid VAT.

Frankly, as you will have surmised if you read my e-mail on whether or not a lukewarm sandwich is standard or zero rated, I do not normally involve myself in VAT planning for clients. This is a very specialised field, as the 11 year teacake saga still being played out well illustrates.

But I am passionate about other forms of tax planning, and ensuring our clients do not pay more direct tax than they need. Which is why I created the Tax Planning Fact Find.

If you have not yet ordered your Tax Planning Fact Find, or attended my training day showing you how to use this to create additional profit opportunities and motivate clients to pay fees and retainers, why not do so now?

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About Graham Dragon

Note: We do not accept liability for the content of our e-mail Journal or for the consequences of any actions taken or not taken by yourself or any third party on the basis of the information provided. We are unable to advise you on tax matters. If you wish to obtain further information or help on this or on any other tax matters you should consult with a tax accountant or other suitably qualified and experienced tax professional.

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