Taxman takes a bite out of Pringles

Three judges and a VAT tribunal decided that Pringles are crisps and not cakes. Who’d’ve thought it?!

Whereas foodstuffs generally are zero-rated by the VAT man, crisps are not. Proctor and Gamble had avoided paying VAT on Pringles by claiming they were cakes. Now they find they owe £100 million of unpaid VAT and £20 million per year from now on.

The Telegraph chews this over:

Pringles, the law has declared, are no longer cakes, but crisps. This has cost their makers £100 million in VAT. Last year, the law declared that Pringles were not crisps, but a cakey kind of thing. It is not so much that the judges are trying to have their cake and eat it, as that a crisp high court judgment is an appeal court’s undercooked argument.

This question of VAT liability takes the biscuit for litigation. The proof of the Pringle is in the pleading. Lawyers have already had to argue that Marks and Spencer teacakes are indeed cake, and the makers of Jaffa cakes had to resort to law to prove that their chocolate-covered confections were not biscuits, which would have taken them into the luxury tax bracket. It all puts bread into lawyers’ mouths, but it must make Marie Antoinette spin in her grave.

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