The difference between: a biscuit and a cake

Student Life

54mm in diameter with a sponge base, a layer of orange-flavoured jam and a coating of chocolate, it can be none other than the classic McVities Jaffa Cake. But is it actually a cake?

“Cake, biscuit – who cares?” I hear you say. But bear with me, for the difference between a cake and a biscuit is no trifling matter. This difference does not concern only the sweet-toothed among us. This difference has bamboozled the taxman (a.k.a. HM Revenue & Customs).

Under EC legislation, cakes are zero-rated for VAT whereas chocolate-covered biscuits are not. McVities, therefore, was forced in 1991 to prove that its chocolate Jaffa Cakes really deserved their ‘cake’ and, hence, tax-free status. According to HMRC (then HM Customs & Excise), it was no coincidence that Jaffa Cakes are found in the biscuit aisle. “They’re produced like biscuits, they’re packaged like biscuits and they look like biscuits,” cried the taxman.

HMRC might have been seeking a larger slice of McVities’ cake (steady on) but even they could not have anticipated the 30cm Jaffa Cake made by the British firm in order to verify its cake-worthy status. This mammoth bickie successfully illustrated that, like a cake, a Jaffa Cake hardens when stale, as compared to a stale biscuit, which will take up moisture to become limp. Overall, the government 0 – McVities and all Jaffa Cake-lovers 1.

But McVities had not just saved the humble Jaffa Cake. Oh, no. Using this case as precedent, Marks & Spencer was also able to contest the taxman’s branding of its marshmallow-filled teacakes as ‘chocolate biscuits’ rather than ‘cakes’. After a protracted 13-year-long legal battle against HMRC, the Supermarket chain finally secured a tax rebate worth £3.5 million in 2008.

Not wishing to bore you with any more (although admittedly quite interesting) tax law, perhaps the final word ought to be left to David Wrighton of The Times: “Anyone who has tried them knows that teacakes are so dangerous and addictive that they should be treated not as cakes or biscuits but as a Class A drug (and so be zero-rated for VAT)”.

Amedea Kelly-Taglianini

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