Food giant Walkers must pay VAT on its mini poppadoms after judges ruled they are actually more like crisps.
The PepsiCo-owned manufacturer hoped to escape paying the tax on its Sensations Poppadoms because, it argued, they were not made from potato and the product said poppadoms on the packet – meaning they are a food and not a snack that attracts the 20% levy.
But in a win for the taxman, and one that could be costly for the company, a tribunal said they were indeed crisps in all but name since 40% of the ingredients were “potato-derived”.
The judgement, dated January 10, was withering about the name on the packs.
Tribunal judges, Anne Fairpo and Sonia Gable, said: “Nominative determinism is not a characteristic of snack foods: calling a snack food Hula Hoops does not mean that one could twirl that product around one’s midriff, nor is Monster Munch generally reserved as a food for monsters.”
The case has echoes of past battles with HM Revenue and Customs.
McVitie’s successfully argued in the 1990s that Jaffa Cakes are in fact cakes and not biscuits, therefore exempt from VAT.
In 2008, Marks & Spencer won a protracted legal battle on overpaid VAT on its chocolate teacakes, with Europe’s highest court ruling they were cakes and not a biscuit.