M&S has joined the viral trend of the Japanese strawberry sando by launching its own version, causing a stir online, but the sweet treat has reignited the age-old question about VAT.
The British retailer's strawberry and cream (half) sandwich, presented in its meal-deal packaging, is trending on social media as shoppers rush to sample the sweet sandwiches, as reported by .
Many are curious to know if the bread is the standard meal-deal bread or if it is sweet, as the Japanese typically use milk bread in their original version.
However, as the excitement grows, accountants and lawyers have been sparking discussions on LinkedIn, questioning whether this dessert sandwich may be classified as confectionery.
If a food product is deemed a confectionery, it will be liable for 20 per cent VAT, compared to zero-rated, which most sandwiches typically fall under.
The enigma surrounding VAT has long endured, following the famous 'Is it a biscuit or a cake' debate from the Jaffa Cake legal battle with HMRC. City AM has an extensive article on VAT legal battles the º£½ÇÊÓƵ's favourite snacks had with the tax authority.
However, a recent VAT case concerning giant marshmallows has caused significant confusion.
The tax authority decided that the 'mega' marshmallows should have been taxed at the standard rate rather than the current zero-rated rate, resulting in London-based Innovative Bites seeking an appeal of that decision.
The case has been repeatedly brought before the courts, each time taking an unexpected turn. The most recent development took place in Marsh, where an appeal was granted following queries about the consumption of large marshmallows.
As Adam Craggs, partner at RPC, observed, "the M&S jam sandwich may soon join this curious canon of VAT case law."
Jaffa Cake 2.0
"We are accustomed to sweet peanut butter and jam, or chocolate spread, sandwiches," Max Schofield, barrister at Devereux Chambers, explained, highlighting that the ambiguity from the 'mega marshmallows' case could categorise sweet sandwiches as 'confectionery'.
Simon Knivett, VAT manager at HW Fisher, part of the Sumer Group, clarified: "The bread in this new M&S sandwich is sweetened, and the concept of eating a sandwich with your hands is not ridiculous, which suggests a 20 per cent VAT could be applicable if we strictly interpret the wording of the legislation.
"This is due to a modification in the late 1980s which aimed to include cereal bars with the phrase 'sweetened prepared food... eaten with the fingers'," Schofield pointed out.
Knivett highlighted that the Court of Appeal declared in the 'mega marshmallow' case that 'anything falling within Note 5 is "confectionery"... absent absurdity or the like.'
"Therefore, is it absurd to consider a product which resembles and is marketed as a sandwich as confectionery," he added.
Craggs emphasised the complexities businesses face with VAT, stating: "cases like this underscore the challenges of interpreting and applying VAT rules in the context of food. The body of legislation is dense, inconsistent in places, and filled with exceptions that often feel arbitrary."
The buzz around strawberry sandwiches might soon attract HMRC's attention, but as a sharp LinkedIn user remarked: "Anyone buying this monstrosity should be charged 100 per cent VAT."
