How much is a Tunnock’s/Lees Snowball worth? Answer – £2.8M!!

The Lanarkshire firms, Tunnock’s and Lees who make confectionery, biscuits and cakes have just won a near 20 year battle with HMRC over the legal definition of a Snowball.  HMRC classed the Snowball as confectionery and therefore subject to VAT in the same way biscuits are vatable.

Tunnock’s and Lees regarded the Snowball as a cake, similar to Teacakes.  Products classified as cakes do not attract VAT!

After many, many tasting sessions, the Judges at the First-tier tax tribunal ruled in the manufacturers favour on appeal, meaning a recovery of £2.8M in VAT by the two manufactures.

I have no idea as to the logic behind why cakes are not subject to VAT, perhaps someone can enlighten me.  I can see the logic on children’s clothes and shoes not attracting VAT, but cakes??

Especially nowadays when health experts are telling us to eat less sugar and to add a sugar tax to certain products.  It does seem strange that a cake does not already attract VAT.

Anyone fancy a Snowball then?

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