VAT anomalies

Is ZT caviar one of them?

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https://www.theguardian.com/money/2024/feb/26/charges-for-loo-roll-none-...

Yes, VAT does have anomalies but why is "...toilet rolls attract 20% VAT but caviar is VAT-free." one of them?

 

Replies (11)

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By Roland195
26th Feb 2024 13:48

Print a story on the toilet roll, cover the caviar in chocolate and then have them delivered using a Land Rover Discovery someone has installed temporary seating in.

Keep the Indirect Tax Advisory in enough fees to be able to purchase said products themselves.

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Replying to Roland195:
stonks
By WinterDragon
26th Feb 2024 13:58

I cannot wait to read the tribunal's decision for this one.

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By paul.benny
26th Feb 2024 14:01

The whole article looks like piece of self-serving PR designed to promote a particular brand of toilet paper.

We expect a certain level of public services but as a number of the comments under the article illustrate, there are Special Reasons why we should pay less tax and Someone Else should make up the shortfall.

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By rmillaree
26th Feb 2024 14:16

no - its clearly food in similar manner to fish isnt it ? so where is the anomoly.

Hey back in the day breaded scampi was a luxury item that i was only lucky enough to eat once or twice a year.

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VAT
By Jason Croke
26th Feb 2024 14:39

Caviar is a raw fish product, as is fresh salmon, fish cakes and frozen fish fingers - they are all the same for VAT purposes, a foodstuff for human consumption that doesn't fall into an exception.

The main exceptions being foods which are confection/sweet or foods which are served hot (catering). Therefore, caviar and cod fillets are both zero rated, VAT has never been driven on whether something is a luxury or not. How do you define luxury?

The manufacturers love a good VAT free campaign but it only benefits the manufacturers. The consumer does not see a reduction in price or if there is an instant price drop, it creeps back up again, loads of studies on this and they all prove that consumers do not gain.

Amazon used to do 99p digital books, incl .20% VAT, when digital books became zero rated, guess what, Amazon still charged 99p. Consumer didn't get a cheaper book, Amazon just kept more for themselves. Same happened with feminine hygiene products, they're not any cheaper than they were before.

There may be a short term price drop on the back of any VAT rate change, then prices creep back up, blamed on inflation, minimum wage increases, etc. Even if a VATt rate change came with a law to force manufacturers to pass on that saving, it'll disappear under rising inflation....remember when Treasury froze fuel duty and yet petrol prices went sky high last year?

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Replying to Jason Croke:
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By DJKL
27th Feb 2024 09:26

Bring back duty on Wig Powder.

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VAT
By Jason Croke
26th Feb 2024 14:47

I think foods and VAT are fairly logical, just that manufacturers keep inventing new products that straddle the historical definitions in the law, what for example is "an energy bar?" The adverts of yesteryear told us that a Mars bar would help you work, rest and play. So that sounds like an energy bar, but its not, it's a chocolate bar.

The Tribunals regularly see cases on whether a food thing is zero or standard rated - they are often covered here at AccountingWeb - the manufacturers invest mega-bucks in going to Tribunal because a lot of extra profit margin rides on it, if you can't win in a Court of law, then the next option is to get the government to change the law - hence the toilet rolls would never win a zero rating argument, change can only come from government and from letting consumers think they can save money.

But whether it is a Pringle, energy bar, biscuit, donut or toilet roll, they are only having the argument because there is money resting on a successful outcome, the consumer does not feature at all. They're not spending millions to zero rate a potato chip or toilet roll for the consumer, its so that they can get more margin and squeeze the pricing amongst competitor products.

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Replying to Jason Croke:
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By Roland195
27th Feb 2024 09:22

As new products emerge, there has to be a better way to define what a product is than having the Tribunals (who seem to be somewhat out of touch) wrestle with 50 year old legislation and then make a judgment based on something entirely different.

At the weekend, I came across a wee stall selling brownies - all sorts of varieties made with everything under the sun. If that were my client, I would struggle to provide any meaningful advice on VAT status of this - There is one made with (not covered with or coated with but drizzled with) Kinder chocolate that must involve the purchase of Standard Rated Confectionary that gets turned into a Zero Rated Cake?

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Replying to Roland195:
paddle steamer
By DJKL
27th Feb 2024 09:30

Suggest they upgrade the chocolate, Kinder, yuk, one step up from the USA stuff we get sent in our food relief parcels from the States. (They certainly get the better end of the deal as what we send them is actually edible-Cadburys, Maltesers etc)

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Replying to DJKL:
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By Roland195
27th Feb 2024 10:10

Funny you mention Maltesers as this was also a variety of the brownie available.

So you can stick absolute anything you like in or on a cake which includes items that would be Standard Rated on their own but if you add something to increase the protein content, then it only qualifies to be Zero Rated if the "mouth feel" is satisfactory to consider enjoying at Afternoon tea.

As I have said before, it's all abstract fun & games with everyone enjoying themselves hugely sampling the test products and levying fees until the lad doing the baking here is bankrupted.

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Replying to Roland195:
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By bendybod
27th Feb 2024 10:44

Afternoon tea just makes me think of cucumber sandwiches which must be one of the most repugnant mouth feels and tastes known to man (in my opinion)! I loathe cucumber because of the texture in my mouth!

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