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You can find the current article at its original source at https://www.theguardian.com/business/2019/jan/16/crumbs-judge-deems-brownie-a-cake-and-exempt-from-vat
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| Crumbs! Judge deems brownie a cake and exempt from VAT | Crumbs! Judge deems brownie a cake and exempt from VAT |
| (43 minutes later) | |
| A health food brownie containing dates and brown rice bran has been deemed a cake – and therefore exempt from VAT - after a judge taste-tested the product alongside Mr Kipling’s French fancies and Tunnock’s teacakes. | A health food brownie containing dates and brown rice bran has been deemed a cake – and therefore exempt from VAT - after a judge taste-tested the product alongside Mr Kipling’s French fancies and Tunnock’s teacakes. |
| Pulsin could reclaim up to £300,000 from HMRC after Judge Amanda Brown ruled in the Gloucestershire-based manufacturer’s favour, saying the company’s Raw Choc Brownies would “absolutely not look out of place” at “a cricket or sporting tea”. | Pulsin could reclaim up to £300,000 from HMRC after Judge Amanda Brown ruled in the Gloucestershire-based manufacturer’s favour, saying the company’s Raw Choc Brownies would “absolutely not look out of place” at “a cricket or sporting tea”. |
| Brown dismissed Pulsin’s claims that the brownies were “not sweet enough” to be considered confectionery, on which VAT is charged, but said this did not exclude them from being cakes. | Brown dismissed Pulsin’s claims that the brownies were “not sweet enough” to be considered confectionery, on which VAT is charged, but said this did not exclude them from being cakes. |
| Unlike sweets, cakes are considered to be a staple food and therefore zero-rated for VAT. Biscuits are also zero-rated unless they are a luxury item, which usually means they have chocolate on top. | Unlike sweets, cakes are considered to be a staple food and therefore zero-rated for VAT. Biscuits are also zero-rated unless they are a luxury item, which usually means they have chocolate on top. |
| Brown said the ingredients used in making the brownies, the manufacturing method, their taste and texture were all “consistent with those of a cake”. | Brown said the ingredients used in making the brownies, the manufacturing method, their taste and texture were all “consistent with those of a cake”. |
| She said: “With the rise in obesity the public look for cakes different in nature to those of the 1970s. | She said: “With the rise in obesity the public look for cakes different in nature to those of the 1970s. |
| “Put alongside a slice of traditional Victoria sponge, a French fancy and a vanilla slice or chocolate eclair, the products may look out of place. | “Put alongside a slice of traditional Victoria sponge, a French fancy and a vanilla slice or chocolate eclair, the products may look out of place. |
| “However, put alongside a plate of brownies or, for instance, at a cricket or sporting tea, where it is more likely that bought and individually wrapped cakes will be served on a plate, the products would absolutely not stand out as unusual.” | “However, put alongside a plate of brownies or, for instance, at a cricket or sporting tea, where it is more likely that bought and individually wrapped cakes will be served on a plate, the products would absolutely not stand out as unusual.” |
| The dispute began in 2016 when Pulsin said it had wrongly been paying VAT on the products for four years. | |
| An HMRC spokesman said: “We are carefully considering the decision in this case.” | An HMRC spokesman said: “We are carefully considering the decision in this case.” |
| Brown’s ruling referred to the 1991 Jaffa Cakes case when McVitie’s successfully argued that the product was a cake and not a biscuit and so not liable for VAT. | Brown’s ruling referred to the 1991 Jaffa Cakes case when McVitie’s successfully argued that the product was a cake and not a biscuit and so not liable for VAT. |
| A tribunal determined that certain characteristics of the Jaffa Cake were cake-like, including the ingredients and texture, but it was also the size and shape of a biscuit, packaged and sold alongside biscuits and presented to be eaten with the fingers and not, as might be expected of a cake, eaten with a fork. The product was nevertheless determined to be a cake. | A tribunal determined that certain characteristics of the Jaffa Cake were cake-like, including the ingredients and texture, but it was also the size and shape of a biscuit, packaged and sold alongside biscuits and presented to be eaten with the fingers and not, as might be expected of a cake, eaten with a fork. The product was nevertheless determined to be a cake. |
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