Morrisons loses £1m VAT case about snack bars
Our favourite topic of VAT and food has again reared its head with a first tier tribunal concluding that a date-based snack bar sold by supermarket Morrisons was standard-rated confectionery and not a zero-rated cake.
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Isn't the answer if you can put it in your mouth and swallow it, its zero rated, unless you are sitting down being served it and then there's 10% vat.
Then chippy owners wouldn't have to work for £5 an hour.
But I guess that would do a lot of us out of a job, so maybe not....
At which point, you simply re-create the problem with the border between food (zero) and medicines (exempt).
Of course, there's the alternative of not relieving ANY of them... *ducks and runs...*
Neil, are there any instances you can think of where the Office of Tax Simplification has made the tax codes simpler?
Maybe I need a better foil hat but am I being mad to think that our VAT laws are deliberately so complex to keep a whole army of lawyers and accountants in work? If it was costing them money I suspect VAT would never have been allowed in the first place....
I’m quite a fan of Nakd bars, believing them to be a healthy fruit and nut based alternative to confectionery. I guess in the light of this damning judgment I will have to cut them out! But seriously what a joke - how can anyone, let alone a judge and tribunal maintain there is anything even faintly clear about such arbitrary and semantic definitions.
Wouldn't the supplier of the Nakd bars have an opinion on whether the bars were VATable to advise their customers?
Was Morrison's the only customer who decided they were zero-rated?
But what if his trousers aren't completely chocolate-covered? What if the trousers are merely in a spotty design (using chocolate for the spots to match his eyes)?
Isn't the answer to simply abandon this EU imposed tax, now that we are out of the EU, and go back to a more simpler sales tax?
Whatever tax you have, you will always have the same problem. As soon as the principle of exemption for anything is conceded, along come the great minds seeking to bend whatever boundary is set.
And while the EU may have been the proximate cause ofVAT in our case, most countries in the world now have copied it, even if it's called something else. Anyone remember the "simple" Sixties Purchase Tax?
I had to look at VAT on food many years ago and quickly had to bring in VAT specialists. As with many of the replies, the arbitrariness of the rules drives you mad but commercially there were serious implications. Competition was so tight that the manufacturer or the retailer would not be able to supply some lines if there was a 20% hike in the retail cost, so arguments about the amount of chocolate used became quite important, however absurd it appears.
Exemptions will always bring rise to those who will seek to exploit those exemptions, whether it is selling your light fittings separate from your house to avoid SDLT thresholds or in this case, food items.
The main issue is that law doesn't keep up with the fast moving world of commerce, only in the last 12-18 months do the UK/EU tax authorities recognise e-books, the original zero rating based on books being printed matter, so until they changed the law, books had to be printed.
Food is an even more fast moving sector, trend is now towards vegetable or quinoa based crisps - one because they are healthier and two because they're zero rated as opposed to potato based crisps as the VAT guidance revolves around potato based snacks as that is all we had in the 70's/80's.