A Muddled Tale Of Luxury And Tax

What’s the difference between a cake and biscuit?  US readers may have a different answer to this, so for “biscuit” read “cookie”.  The answer, in the UK, is actually more than a difference in ingredients.  It’s a case of whether or not it is a luxury.

Let me introduce you to the Jaffa Cake, if you have been unfortunate enough to never have experienced such a fine thing.  Wikipedia describes them best:

Jaffa Cakes are biscuit-sized cakes introduced by McVitie and Price in the UK in 1927 and named after Jaffa oranges. The most common form of Jaffa Cakes are circular, 2 18 inches (54 mm) in diameter and have three layers: a Genoise sponge base, a layer of orange flavoured jelly and a coating of chocolate. Jaffa Cakes are also available as bars or in small packs, and in larger and smaller sizes. The original Jaffa Cakes come in packs of 12, 24 or 36

They can be eaten in a number of ways.  One can eat it like a normal biscuit – all three layers at once.  It’s also possible to eat the chocolate, sponge and orange jelly separately.  Another thought is to eat the sponge and chocolate, lick the jelly and throw it up at your ceiling to see how long it will stick for.  Fun times.

(It’s also worth noting that, while cakes are individual, they are packaged in 12s.  Therefore, one portion of Jaffa Cakes is 12 cakes.  Them’s be the rules.)

However, the humble Jaffa Cake is not just an amazing snack.  It is a taxman’s conundrum.

In the UK, a cake is a “staple of living” (damn straight) whereas a biscuit isn’t – it’s a luxury.  A luxury item is taxable, so whether the Jaffa Cake is a luxury biscuit or staple cake is important, and the clue isn’t just in the name.

At a VAT tribunal in 1991, McVitie’s proved once and for all that the Jaffa Cake is a cake by arguing over what happens when cakes and biscuits go off.  When a biscuit goes bad, it goes soggy.  When a cake goes stale, is goes hard.  The latter is the behaviour of a Jaffa Cake, and therefore we don’t have to pay an extra 20% for such orangey decadence.

This isn’t the only time that tax on food has caused a scandal.  Food bought for cooking at home is not taxable, but food prepared and consumed in restaurants is.  At the border is food baked and cooked on site but consumed outside of the premises.  If the food is “incidentally” hot (such as bread that may be warm after baking) then no tax applies.

In 2012, there was a proposal to tax the sausage roll and pastie, hot foods eaten on the street out of a paper bag.  To do otherwise is just wrong, and it’s common knowledge that a sausage roll not eaten out of a paper bag on the street is rubbish.  It’s questionable whether they’re even OK when not accompanied by a gingerbread man and a carton of Ribena.

Fortunately the government were forced in to a u-turn.  It just goes to show how hard the people of the UK are prepared to fight for luxuries and simple pleasures!

I want a real fine car, fly Miami too
All the rum, I want to drink it, all the whiskey too
My woman need a new dress, my daughter got to go to school
I’m working so hard, I’m working for the company
I’m working so hard to keep you in the luxury

You can’t call me lazy on a seven day a week
Make a million for the Texans, twenty dollar me
Yes, I want a gold ring, riding in a limousine
I’m working so hard, I’m working for the company
I’m working so hard to keep you in the luxury

Now listen, I’m a proud man, not a beggar walking on the street
I’m working so hard, to keep you from the poverty
I’m working so hard to keep you in the luxury, oh yeah
I’m working so hard, I’m working so hard
Harder, harder, working, working, working

I think it’s such a strange thing, giving me concern
Half the world it got nothing the other half got money to burn
My woman need a new dress, my daughter got to go to school
I’m working so hard, I’m working for the company, oh, yeah

Luxury by Rolling Stones

Comments 5

  1. Judy Dykstra-Brown

    I’ve always wondered what a Jaffa Cake is. Thanks for solving the riddle. Now I want one.. er, twelve. An informative, entertaining and well-written piece. Happy to find your blog.

    • You’re missing out, Judy! I highly recommend them if you find them in your part of the world!

  2. Eleanor Parks

    I am actually eating a packet of Jaffa Cakes right now. I got them from Aldi here in my adopted home town of Brecht. These ones are cherry flavour! Delicious with coffee!

    • Ooh! Haven’t had the cherry ones for ages. I have a coffee on at the moment which has cherry notes too. I see a plan forming!

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