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The insanity of the VAT on food regulations

Posted by on Tuesday 4 January 2011 in frugal | 3 comments

This morning Sarah Pennells, The Savvy Woman, pointed me in the direction of a wonderful document: HMRC’s rules on whether food goods are zero- or standard rated for VAT.

Most food is zero-rated so not subject to VAT but some things are “standard rated” – some rather strange things.

Not subject to VAT Subject to VAT
Marshmallow teacakes (with a crumb, biscuit or cake base topped with a dome of marshmallow coated in either chocolate, sugar strands or coconut) “Snowballs” without such a base are classed as confectionery
Caramel or “millionaire’s” shortcake consisting of a base of shortbread topped with a layer or caramel and (usually) chocolate or carob Shortbread partly or wholly chocolate-covered
Bourbon and other biscuits where the chocolate or similar product forms a sandwich layer between two biscuit halves and is not continued onto the outer surface All wholly or partly coated biscuits including biscuits decorated in a pattern with chocolate or some similar product
 
Gingerbread men decorated with chocolate unless this amounts to no more than a couple of dots for eyes
Frozen yoghurt which needs to be thawed completely before it can be eaten and which has been frozen purely for storage or distribution Frozen yoghurt
Toffee apples and other apples on a stick covered in chocolate, nuts etc Nuts or fruit with a coating, for example of chocolate, yoghurt or sugar
Roasted or salted nuts supplied while still in their shells (such as “monkey nuts” and pistachios), toasted coconut, toasted almonds and other toasted chopped nuts held out for sale in retail packs specifically for home baking All other roasted or salted nuts
Hundreds and thousands, vermicelli and sugar strands as cake decorations Any other items which are sold in the same form as confectionery
Sweetened dried fruit held out for sale as snacking and home baking Sweetened dried fruit held out for sale as confectionery/snacking

Basically, you need your chocolate inside your biscuits (not on the outside), your shortbread topped with both caramel & chocolate, and your gingerbread men with just eyes, no buttons! No buttons, dammit!! (There is definitely a joke in there about millionaire’s shortbread getting a tax break compared to normal chocolate-covered shortbread – but my brain is too befuddled by these regulations to make it!)

I think it’s interesting that there is such a distinction between stuff used for home baking and stuff that’s just for snacking/treats – I always wondered why, say, dried fruit was in a few different places in the supermarket.

As we don’t spend that much money, I wasn’t too bothered about the VAT hike – but now I feel like we should avoid VAT-able food products on principle of the ridiculousness of these rules! Only biscuit-based marshmallow teacakes for us from now on ;)

3 Comments

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  1. strowger

    I want a job (on 50k/year with a car and a civil service pension) determining whether or not gingerbread men are sufficiently chocolated to be VATable.

  2. Alice

    Hmm, I’ve often noticed things like pine nuts being cheaper in one packet in one part of Tescos than in a different packet in a different part of the store. I bet this is why, and now I realise which will be cheaper so I don’t need to walk across the store to check the “snacking” shelves to compare.

    Mad though, isn’t it?

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