What began as isolated disputes over niche items is now reshaping how cakes, baked goods and sweet snacks are treated for tax purposes. The result is that products previously considered zero-rated are increasingly being reclassified as standard-rated confectionery, subject to 20% VAT.
The change centres on a single phrase in VAT legislation, which defines confectionery as: “Chocolates, sweets and biscuits; drained, glace or crystallised fruits; and any item of sweetened prepared food which is normally eaten with the fingers.”
HMRC and the courts are treating this final clause as decisive. If a product is sweetened and typically finger-eaten, it is now likely to be deemed confectionery.
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