Of course, the Jaffa cake box is an example and the principle can be replicated to anything you could reimburse for expenses. In January 1940, food rationing began using voucher books. Not only was it a British phenomenon – here are some American stamps circa 1944 at the Columbus Museum, for example – but it took longer and more memorable than elsewhere, with rationing not ending until 1954. Product nameIngredientsProduct textureProduct texture when it expiresProduct structureProduct sizeHow the product is sold in storesHow the product is marketed The court rejected the expert evidence because it was beyond the capacity of an ordinary buyer.  Jaffa cakes are a cake introduced to the United Kingdom in 1927 by McVitie and Price and named after Jaffa oranges. The most common form of Jaffa cake is circular, 2+1⁄8 inches (54 mm) in diameter, and has three layers: a noise sponge cake base, an orange-flavored jam layer, and a chocolate layer. Each cake contains 46 calories. Jaffa cakes are also available in bars or small packages and in larger and smaller sizes.  The original Jaffa cakes are now available in packs of 10, 20, 30 or 40 pieces, after being reduced by 12 or 24 per pack in 2017.  This was accompanied by a change in fiscal policy. The blame was John Allsebrook Simon, 1st Viscount Simon, Chancellor of the Exchequer when war broke out in 1939. He proposed and eventually received the purchase tax, which underwent several surcharges in the following years, but was essentially aimed at reducing the use of “non-essential” items (and thus saving essentially war resources) by taxing them. As the Chancellor explained to parliament: The most frequently reported aspect of the case was that a Jaffa cake, when stale, becomes hard like a cake and not soft like a cookie.
This means that even if the cake is covered in chocolate, it will still be exempt from VAT. However, if a biscuit is fully or partially covered with chocolate, it will be taxed at the standard VAT rate of 20%. Those who believe that Jaffa`s cakes are actually cookies argue that McVitie`s products are always found in the cookie aisle in stores – not in the cake aisle. Another case, in 1989, that of W Jordans (Cereals) Ltd, attempted to present “four varieties of crispy bars and two varieties of chewing bars” as biscuits. (If, instead, they were “sweet ready meals normally eaten with the fingers,” they were subject to the tax.) The court ruled that VAT applied because the “ordinary man on the street” would not call him cookies. According to the official website of Her Majesty`s Revenue and Customs, the courts` decision depended on the ability to clarify exactly what made a cake a cake and a cookie a cookie, and whether Jaffa cakes were more in line with one definition or another. In the UK, VAT is levied on chocolate-coated biscuits – but not on chocolate-coated cakes. McVitie`s classified Jaffa`s cakes as a cake and had to defend this categorization in a VAT court in 1991. Here`s everything you need to know to find out if a Jaffa cake is actually a cake or a cookie – and what happened when the discussion was brought to court. The court ruled in favour of McVitie`s, finding that Jaffa cakes are legally considered cakes, meaning McVitie`s does not have to pay VAT on Jaffa cakes in the UK. It`s an age-old question: Is a Jaffa cake really a cookie or a cake? McVitie`s had been making Jaffa cakes since 1927.
But they were challenged because they labeled their chocolate and orange treats as “cakes” by Her Majesty`s Customs and Excise in 1991. They are packaged like cookies, advertised in the same way as cookies, and are the size of traditional cookies rather than cakes. Although Jaffa cakes were accepted as a zero rate of VAT from the start, HMRC changed their mind and if they could prove they were biscuits and not cakes, VAT would have to be levied and McVities would face a £3 million bill. While this may seem like a fine line, it has some important lessons for us when we think about recovering VAT on expenses. During the legal battle between Mcvitie`s and Her Majesty`s Customs and Excise, Mcvitie`s baked a giant Jaffa cake to prove that Jaffa`s cakes were really cakes and not cookies. Therefore, the court ruled that the modest Jaffa cake is indeed a cake and therefore a zero-rated food. This led to a bitter legal battle between the UK government and McVities in 1991, when the UK Customs and Excise Agency ruled that Jaffa cakes should be classified as chocolate-coated biscuits and therefore subject to the standard VAT rate. Jaffa cakes were previously considered cakes by customs and excise duties, which are exempt from tax. But the turning point was when McVitie`s QC pointed out how cakes harden when stale, cookies become mushy. A Jaffa goes hard.
The case has been proven. The court also noted that Jaffa cakes have the texture and ingredients of sponge cake and that the terry cake portion of a Jaffa cake is an essential part of the product in terms of volume and texture when consumed. To this end, the main arguments on behalf of Customs and Excise were that Jaffa cakes are usually sold with side dishes, are roughly biscuit-shaped and are often eaten in their place – adding that McVities itself markets the product more like a biscuit than a cake. We have to go back to 1983 before the cake was explicitly mentioned: . An essential part of the product, not in taste, but in quantity and texture when consumed. The case was the subject of a lengthy trial that ended in a VAT court. Thus. What does the law actually say about our cake/cookie dilemma? The Finance Act, which set the framework for the law, was introduced in 1972 and food arrived in 1973. This may seem like a silly question – it`s surely a piece of cake, since the clue is in the name. Who would have thought that the limits of confectionery, candy, chocolates, chocolate chip cookies, cakes and cookies would be taken to court? And why is it so important that the confectionery is a cake or a cookie? In the judgment, it was found that the name of the product played a secondary role.
Just because it`s called a “cake” doesn`t mean it`s like that. The arguments for Jaffa cakes to be a biscuit were: their size, as they looked like biscuits rather than cakes; the packaging, because it looked like cookies; and marketing, as they were usually offered for sale with cookies rather than cakes. It was also alleged in the dish that they were eaten as a snack with the fingers, while a cake can be expected with a fork. Cakes were then a staple, but Jaffa cakes resembled a chocolate-coated biscuit and, according to HMRC, were designed to be eaten as a snack in the same way as a biscuit. In fact, you`ll usually find them in supermarket aisles next to digestive products and rich teas. Since McVitie`s did not register the name “Jaffa Cakes” as a trademark, other cookie manufacturers and supermarkets made similar products under the same name.  The classification of the product as cake or biscuit was part of a VAT tribunal in 1991, with the court`s ruling in favour of McVitie that Jaffa cakes should be considered cakes and not biscuits for tax purposes.  In 2012, they were ranked as the best-selling cake or biscuit in the UK.  For those who wonder why the courts did not simply consider the fact that they are called Jaffa Cakes, the judge who presided over the case, Mr. D.C. Potter, was invited to review it and ruled that it was “not of serious relevance” because the name of a product often has little to do with its actual function.