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News Cake

Sunday, May 8th, 2011

Is a Jaffa Cake a cake or a biscuit?

Maybe it doesn’t matter to some, but it does to others. As we know from today’s news, cakes AND biscuits are exempt from VAT, but if the biscuit is chocolate covered, it is a luxury, according to HMRC and subject to VAT. So if a Jaffa Cake is in fact a biscuit, it should cost 17.5% more than it would if it was a cake.
Cakes AND biscuits are baked! And they are always stored with the biscuits in the supermarket.
Does the price of Jaffa Cakes include VAT? If it does, then HMRC consider it to be a chocolate biscuit.
I think even if it was a biscuit, it could have “cake” in the name without being a cake – mock turtle soup contains no turtles, real or fake, and toad in the hole contains no toads.

At a guess its classed as a cake, The name Jaffa Cake implies its cake. It must meet some sort of starndard to claim that and not be classed as a biscut.

Other wise it would be false advertising and get into serious trouble. Or so I would presume.

On a personal note I would class it as cake. I thought biscuts to have some sort of crunchiness to them. The texture of a jaffa cake is to soft to have any crunchiness in it.

Googled it

Regular-sized Jaffa Cakes are circular, approximately 54 mm (2⅛ inches) in diameter, and 7 mm (¼ inch) in depth. They comprise three layers; a sponge base, a layer of orange jelly of narrower diameter than the base (approximately 38 mm), and a layer of chocolate covering the jelly and the margin of the sponge.

I think the layer of sponge does it for me Its a cake. and found this

Under UK law, no VAT is charged on biscuits and cakes — they are “zero rated”. Chocolate covered biscuits, however, are subject to VAT at 17.5%. McVities classed its Jaffa Cakes as cakes, but in 1991, this was challenged by Her Majesty’s Customs and Excise and the case ended up before the courts.[6] This may have been because Jaffa Cakes are about the same size and shape as some types of biscuit. A question that the court asked itself was “what criteria should be used to class something as a cake?”

McVities defended its classification of Jaffa Cakes as cakes. In doing so it produced a giant Jaffa Cake to illustrate that its Jaffa Cakes were simply mini cakes.

McVities argued that a distinction between cakes and biscuits is, inter alia, that biscuits would normally be expected to go soft when stale, whereas cakes would normally be expected to go hard. It was demonstrated to the Tribunal that Jaffa Cakes become hard when stale. Other factors taken into account by the Chairman, Mr Potter QC, included: name, ingredients, texture, size, packaging, marketing, presentation, appeal to children, and manufacturing process. Contrary to a commonly held belief, whether something is considered a ‘luxury item’ is not a test for VAT purposes.

Mr Potter ruled that the Jaffa Cake is a cake. He further ruled that, if it is relevant, it is not a biscuit. McVities therefore won the case and VAT is not paid on Jaffa Cakes

Interesting point about stale biscuts going soft and stale cakes going hard.

Region 8 News – Offbeat with Bob: Diaper Cakes