Are Jaffa Cakes zero-rated?

The most widely reported aspect of the case was that upon going stale, a Jaffa cake goes hard like a cake rather than soft like a biscuit. Consequently, the tribunal decided that in fact, the humble Jaffa Cake is a cake and therefore a zero-rated foodstuff.

Do Jaffa Cakes attract VAT?

The court was adjudicated by Mr Donald Potter QC, who found in favour of McVitie’s and ruled that whilst Jaffa Cakes had characteristics of both cakes and biscuits, the product should be considered a cake, meaning that VAT is not paid on Jaffa cakes in the United Kingdom.

Are Jaffa Cakes really bad for you?

Verdict: Jaffa cakes are another healthier chocolate biscuit option. With 1g of fat and 46 calories per biscuit (or is it a cake?) She just warns of the high sugar content, which could cause a sugar spike and have you reaching back in the biscuit jar sooner rather than later.

Why is there VAT on biscuits but not cakes?

McVitie’s had been making Jaffa Cakes since 1927. But cakes, on the other hand, have been regarded as a staple food — so were zero-rated for the purposes of VAT. Customs and Excise decided to rule Jaffa Cakes to be biscuits, partly covered in chocolate, and therefore standard-rate.

What are the characteristics of a jaffa cake?

In the Jaffa cake case, it was found that a Jaffa cake is a zero-rated cake rather than a standard rated chocolate biscuit. VAT on Food: A cake or not a cake?

Why are Jaffa Cakes zero rated in VAT?

Customs and Excise had accepted since the start of VAT that Jaffa cakes were zero-rated as cakes, but always had misgivings about whether this was correct. Following a review, the department reversed its view of the liability.

Can a cake be classed as a zero rated food?

Cakes, no matter how opulent or fancy, are always classed as a staple food and zero-rated.

Do you have to pay VAT on zero rated cake?

If zero-rated they are still technically VAT-able, however the rate is 0%. If they are exempt, there is no VAT to pay. So standard rated –bad, zero rated/exempt –good for the customer. One of the more famous cases is that of the humble Jaffa Cake.