United Biscuits has lost a VAT tribunal over whether or not its dipping crisps constituted food or a snack.

The case – described by one tax practitioner as a 'farce' – revolved around whether or not the crisps involved some measure of preparation in order to be eaten.

Food is zero-rated for VAT purposes, whilsts snacks are in many cases standard-rated.

Chairman of the tribunal Colin Bishopp was quoted in The Telegraph saying: 'We are satisfied that dipping a crisp into a pot of salsa cannot amount to preparation in any normal sense of the word.' He threw out United Biscuit's appeal.

Paddy Behan, VAT partner at Grant Thornton, said United Biscuits had been unlucky: 'There are elements of Greek tragedy about this farce because the case turns on the meaning of the word "preparation".'

Two years ago Procter & Gamble won an almost identical case claiming its Pringles Dippers needed 'preparation'.

HMRC defended its pursuit of the case, which involved £100,000 worth of tax: 'We have to pursue cases to safeguard revenues, even if they seem like a small amount of money.'