A recent HMRC case tested the boundaries of what consitutes a cake!

In the case between Glanbia Milk Ltd v HMRC HMRC argued that a number of Glanbia’s products had been incorrectly recorded as zero-rated cakes.  The products in question were cereal bars and flapjacks.


The law states that flapjacks and cakes are listed as zero-rated products in VAT Notice 701/14 . However the HMRC question was whether an ordinary person would think they were eating a cake were they to consume one of these products?


Amusingly, the judges offered to sample all 36 products in question.  They commented that the products had a “crunchy rather than chewy texture” , which was not consistent with eating a cake.

The appeal was dismissed!

This case is a reminder how fine the line can be when it comes to the VAT treatment of food products.  If you are charging zero-rate on any items then be sure that the correct position has been taken before you find yourself in a crumbly situation.