The £3.5 Million teacakes

[Gilps]

Where does the Revenue stand on the jaffa cake question, that's whatI want to know

 

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.

 

The UK argued that paying back the total sum would "unjustly enrich" M&S as customers had paid the money.

 

The ECJ ruled that, in principle, VAT had to be repaid in full, but left the final decision to the British courts.

 

That decision will be taken by the House of Lords, which is likely to rubber-stamp the ECJ's ruling.

 

Marks and Spencer gave a cautious response.

 

"It does look encouraging. However, it is a complex matter and we are reviewing the decision of the ECJ with our advisers," a spokeswoman said.

[nvdm]

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[Jim Price]

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[Gilps]

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