Cake or biscuit, it makes a difference

Only in the UK could this happen:

The UK Treasury is facing a £3.5m bill, because of VAT wrongly imposed on a Marks and Spencer teacake, the European Court of Justice (ECJ) has ruled.

Customers paid VAT for 20 years before the authorities accepted the product was a cake, which does not command VAT.

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3 thoughts on “Cake or biscuit, it makes a difference

  1. We had an issue in an International Trade class I once took about the proper Customs classification of G.I. Joe. The question was whether it was a doll or a figurine. About half the class argued it was a doll, the other half that it was a figurine. You might be able to guess what characteristic distinguished the two sides.

    It turns out it is a doll.

  2. A famous Canadian court case led to a ruling that information is not subject to Customs Duty. Thus, if Microsoft (say) ships a CD with the Windows system on it to Canada, the cost of the physical medium is dutiable, the information on it is not.

    The original case was an appeal by a chicken farmer who would send two truckloads of newborn chicks to the US, where workers would sort the chicks into boys and girls by “feeling them up.” Two truckloads of chicks sorted by gender would then return to Canada. The farmer argued that no Customs duty was payable since he had sent off two truckloads of chicks and was bringing them back, but Canadian Customs wanted duties to be paid because the sorted chicks being returned are more valuable than the unsorted chicks that were sent out.

    Put *that* into your pipe and smoke it, Mr Information Theorist! 🙂

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