We are delighted to report a tribunal success for two manufacturers of ‘snowballs’ – those soft, fluffy, chocolate covered mallows that look a bit like a chocolate teacake.
After a great deal of deliberation (and we suspect a bit of ‘test-eating’!) the tribunal found that these products are cakes not biscuits and therefore zero-rated for VAT purposes.
Needless to say, the case has been picked up by various sectors of the media as a bit of a ‘silly season’ story. It’s no joke though, as the VAT at stake amounted to almost £3 million. That’s a lot of teacakes!
Key message: It is still possible to win against the VAT man – even in cases which at first glance might seem unlikely to succeed.