M&S wins teacake battle after 13 years

After a legal battle lasting 13 years, British retailer Marks & Spencer (M&S) has won the fight over the classification of its teacakes. Consequently, the company is entitled to a £3.5 million rebate.

The long-standing dispute originated when M&S claimed that for 20 years its teacakes were incorrectly classified as chocolate biscuits, hence attracting value added tax (VAT), not payable on most other food items, including standard biscuits and cakes.

The case saw a long debate of the characteristics of biscuits versus cakes ” a case also famously argued when McVities won the argument that its Jaffa Cake was a cake, rather than a biscuit more than ten years ago.

Although UK tax officials has recognised the classification as wrong, they refused to reimburse the paid tax. Now, the House of Lords, Britain’s highest court, has now ruled in favour of Marks & Spencer.