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Unjust enrichment Teacake case concluded

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  • Unjust enrichment Teacake case concluded

    M&S wins tax battle over teacake


    Chocolate teacakes were wrongly classed as a biscuit for two decades

    Marks and Spencer (M&S) has won a 13-year battle over the UK tax status of its chocolate-covered teacake.
    M&S took action against the taxman, who charged £3.5m VAT on teacakes between 1973 and 1994, after having them wrongly classified as biscuits.
    UK tax officials recognised the teacakes had been wrongly classed, but refused to pay back all the wrongly charged VAT that M&S had paid.
    Three Law Lords have now reaffirmed M&S is entitled to a full refund.

    How VAT works on cakes and biscuits
    They upheld last year's decision by the European Court of Justice (ECJ).
    Under UK tax rules, most traditional bakery products such as bread, cakes and flapjacks are free of VAT, but the tax is payable on cereal bars, shortbread and partly-coated or wholly-coated biscuits.
    In 1995 Marks & Spencer claimed a repayment of £3.5m for the VAT payments it had made, but the Commissioners of Customs and Excise refused to refund 90% of the tax.
    It argued that paying back the total sum would "unjustly enrich" M&S as customers had paid the VAT on the teacakes, and it offered to refund £88,440.
    In April 2008 the ECJ said that Marks and Spencer was entitled to a full refund, and on Wednesday the conclusion was not challenged in the Lords.
    Lord Walker said the ECJ ruling left open some matters for the UK courts but that the customs commissioners had decided not to pursue them.
    "After 13 years of litigation, we are pleased that this matter is now finally concluded," the company said in a statement.
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  • #2
    Re: Unjust enrichment Teacake case concluded

    Compound interest anyone?

    Frankly, you'd have thought that they would have learnt their lesson from Customs and Excise Commissioners v United Biscuits (UK) Ltd [1992] where they also lost.

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    • #3
      Re: Unjust enrichment Teacake case concluded

      I think I'm going to have to recover the VAT that I've paid for their teacakes over the past few years then.

      Let's see... an average of 2 teacakes per teabreak, twice a week for the past 13 years. That's umm, errr.... well, quite a lot anyway. LOL
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      • #4
        Re: Unjust enrichment Teacake case concluded

        This reminds me of the Jafa Cake saga..

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        • #5
          Re: Unjust enrichment Teacake case concluded

          yum teacakes:hungry:
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          • #6
            Re: Unjust enrichment Teacake case concluded

            I tell you what does take the biscuit... HMRC tried to declassify the boats that I work on. Tried to say they were not ships for the purposes of tax.

            Hmmm. Pointy end, blunt end. Floats on water. Full of seamen. (Soz) 'Scuse me for appearing dim, but that sounds like a ship to me.
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            • #7
              Re: Unjust enrichment Teacake case concluded

              With all that chocolate coating I always thought they were unjustly too rich. All a bit of a storm in a tea cake I reckon.

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              • #8
                Re: Unjust enrichment Teacake case concluded

                Just what I needed in preparation for my final hearing next week. Lovely jubberley. Good old M&S !!!!!!!!!!!!!

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                • #9
                  Re: Unjust enrichment Teacake case concluded

                  The taxman challenges everything just in case they CAN win. After all it ain't their money they are using in the courts it's ours so there is no risk to them

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                  • #10
                    Re: Unjust enrichment Teacake case concluded

                    So if you have bought teacakes from M&S could you write to them and ask for your VAT refund now ?

                    and PMSL@EXC's 'storm in a tea cake' tickled me
                    #staysafestayhome

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                    • #11
                      Re: Unjust enrichment Teacake case concluded

                      Originally posted by Amethyst View Post
                      So if you have bought teacakes from M&S could you write to them and ask for your VAT refund now ?

                      and PMSL@EXC's 'storm in a tea cake' tickled me
                      LOL of course no dont be daft. You never paid VAT!!!

                      M&S knew they should not be paying VAT and only paid HMRC under duress.

                      So the price you piad was in fact the price less vat, if they had wanted to charge vat there would have been abother 17.5% on top.

                      JMHO

                      Glenn

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