How HMRC's Tax Battles on Snacks Are Shaping UK Food Industry

CREATED BY ROGER EDDOWES Published: 22/05/2025 @ 09:00AM #VATConfusion #SnackTaxBattle #UKFoodRegulations #LegalDisputes #FoodBusinessImpact #ConsumerConfusion

From Jaffa Cakes to Pringles, the ongoing tax battles on snacks in the UK highlight the confusion over VAT regulations. With various rulings leading to strange classifications, I'll explore how these legal disputes impact food businesses and consumers alike ...

Tax battles on snacks, Crispy chips and sugary treats, Wallets grow thinner

The world of Value Added Tax (VAT) is often bewildering, and HMRC finds itself embroiled in a series of amusing yet critical legal tax battles on snacks. Legislation that dictates which food items are subject to zero VAT rates and which are standard rated has resulted in a labyrinth of confusion for manufactures, retailers, and, ultimately, consumers.

The absurdity of these proceedings has turned everyday
snacks into courtroom drama!

To understand the implications, it’s crucial to first grasp what VAT involves. Introduced through the Finance Act of 1972, VAT now constitutes a significant portion of the treasury's revenue, accounting for roughly 20% in 2022.

However, the rules that govern VAT, particularly in relation to food items, are anything but straightforward. Generally, food intended for human consumption carries a zero-rating; yet, exceptions exist where confectionery, hot foods, and savoury snacks fall under the standard rate VAT. It is here that the tax battles begin, as manufacturers look to navigate an often arbitrary regulatory framework.

For example, one of the most famous legal disputes was triggered by the iconic Jaffa Cake. In 1991, a Tax Tribunal ruled that these delectably soft treats are cakes, and thus should enjoy the benefits of zero-rating thanks to their sponge-like texture. Yet, not all snacks have been so fortunate.

In 2009, the potato-based phenomenon known as Pringles faced the taxman, ultimately being classified as a potato crisp, thus holding a VAT liability due to its composition. This case stands as a prime example of how seemingly trivial attributes of food items can engender significant tax ramifications.

And the legal wrangling doesn't end here!

Consumers may be surprised to learn that, despite the familiarity of beloved snacks like Monster Munch or Wotsits, these snacks are subject to VAT while other items, such as Skips, remain exempt. The seemingly nonsensical classifications evoke a sense of frustration among businesses trying to comply with the law, not to mention the complications it introduces in tax compliance and pricing.

A recent bizarre twist in these legal tax battles on snacks involved giant marshmallows, taking a new turn as the court debated whether these marshmallows deserved VAT liability based on how they are consumed. This surreal examination of how people eat snacks certainly puts the absurdity of tax laws on display.

I sometimes shake my head in disbelief at the controversy that embodies the ludicrous nature of the VAT legal framework, leading many to question the wisdom behind HMRC’s relentless pursuit in these cases.

The ongoing tax battles on snacks illustrate a need for reform. Regulatory overhauls are essential to clarify the application of VAT to food products and provide consistency across the market. I feel that the government really needs to reevaluate these guidelines, introducing a new era of clarity for the food and snack industry.

VAT classifications need to become more
logical and straightforward!

While these tax battles may be rooted in law and finance, they also underline an important cultural aspect—the beloved snacks that fill pantry shelves across the nation are now embroiled in an ongoing saga of legal contention.

It’s a peculiar crossroads of tax policy and culinary enjoyment, and always promises amusement and perplexity in equal measure.

Until next time ...

ROGER EDDOWES
Join our mailing list! Click here and be one of the first to know when we publish a new blog post!

Share the blog love ...

Buffer Facebook Twitter Linkedin Pinterest WhatsApp #VATConfusion #SnackTaxBattle #UKFoodRegulations #LegalDisputes #FoodBusinessImpact #ConsumerConfusion

About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach. Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.

More blog posts for you to enjoy ...
		The Towcester Midsummer Music Festival: Music, Community and Good Vibes! Essendon Accounts & Tax are proud to be sponsors for the Towcester Midsummer Music Festival. Established in 2003, the 23rd Towcester Midsummer Music Festival event will take place in the heart of Towcester over the weekend of...
		The HMRC Forums are set to close in June 2025 HMRC is streamlining its services to offer faster, more interactive support through modern channels. So, if your go-to move was to post a forum question and wait for a reply, you’re in for a treat, because help is about to ge...
		Unveiling the UK-US Trade Deal Benefits: Steel, Farmers, and Cars at the Forefront The UK-US trade deal benefits multiple sectors, most notably steel, cars, and agriculture. Tariff reductions aim to enhance trade relations and foster economic growth, providing critical support to struggling industries ......
		HMRC to Implement Voice Recognition for Enhanced Customer Service HMRC has announced a transformative plan to integrate voice recognition technology into its customer service framework. This approach seeks to streamline security checks and improve the overall customer service experience for...
		Understanding the Certificate of Good Standing Credibility is the cornerstone of any successful business operation and helps to improve growth. One pivotal document that aids in establishing credibility is the Certificate of Good Standing from Companies House ......
		How to Prepare for an HMRC Tax Investigation The thought of an HMRC tax investigation can stir up feelings of anxiety and uncertainty within any business owner. However, understanding how to prepare for an HMRC tax investigation can significantly reduce these fears ......
		Employment Allowance: Can It Be Claimed For A Temporary Hire? If you’re a sole director running a limited company, you’ve probably heard that you can’t claim Employment Allowance (EA), and in most cases, that’s true. HMRC’s rules say that companies where the only person on the payroll i...
		Navigating Uncertainty: 5 Strategies for Business Owners Uncertainty is an ever-present challenge for business owners that can dictate the course of strategic decision-making. As tariffs rise and supply chains are disrupted, many now find themselves in a precarious situation ......

Other bloggers you may like ...
		Being a Bookkeeping Buddy Means Being Part Of A Community Posted by Alison Mead on https://blog.siliconbullet.com I created my Bookkeeping Buddy community last year to offer a higher level of support to bookkeepers across the country, and it really has turned into ...
		What is Email Security, And Why Do You Need To Be Really Careful About It? Posted by Pritesh Ganatra on https://blog.btsuk.net Did you know that emails can be intercepted and the contents manipulated, modified and forwarded back to the intended recipient without you even knowi ...
		Blogging: Why You're Not Doing It And How sBlogIt! Can Do It For You Instead Posted by Steffi Lewis on https://www.sblogit.com Blogging is a missed opportunity for many small business owners. You may worry you lack the time or expertise to do it effectively. With sBlogIt!, the ...
		We Plant a Tree For Every New YourPCM Subscriber Posted by Your PCM on https://www.yourpcm.uk As a UK small business owner, staying organised and connected with your contacts is crucial. But many of us don't realise the impact our websites, ser ...