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| Version 0 | Version 1 |
|---|---|
| Teacake set to cost taxman £3.5m | Teacake set to cost taxman £3.5m |
| (10 minutes later) | |
| The UK Treasury is facing a £3.5m bill, because of VAT wrongly imposed on a Marks and Spencer teacake, the European Court of Justice (ECJ) has ruled. | The UK Treasury is facing a £3.5m bill, because of VAT wrongly imposed on a Marks and Spencer teacake, the European Court of Justice (ECJ) has ruled. |
| Customers paid VAT for 20 years before the authorities accepted the product was a cake which does not command VAT. | |
| The UK argued that paying back the total sum would "unjustly enrich" M&S as customers had paid the money. | The UK argued that paying back the total sum would "unjustly enrich" M&S as customers had paid the money. |
| The ECJ ruled that, in principle, VAT had to be repaid in full, but left the final decision to the British courts. | The ECJ ruled that, in principle, VAT had to be repaid in full, but left the final decision to the British courts. |
| That decision will be taken by the House of Lords, which is likely to rubber-stamp the ECJ's ruling. | |
| Marks and Spencer gave a cautious response. | |
| "It does look encouraging. However, it is a complex matter and we are reviewing the decision of the ECJ with our advisers," a spokeswoman said. |