M&S wins VAT teacake battle

Marks & Spencer has won a long-running battle to be fully repaid VAT mistakenly charged against its teacakes.

The taxman had earlier agreed that it had wrongly classed M&S' teacakes as biscuits between 1973 and 1994, during which time the retailer overpaid £3.5m in tax.

However HM Revenue & Customs would not fully refund M&S.

Law lords upheld an earlier European Court of Justice ruling that M&S was entitled a full refund.

HMRC had refused to pay back the tax as customers had footed the bill, and M &S would be 'unjustly enriched', according to the BBC.

Further reading:

Profile: Ian Dyson, group FD of Marks & Spencer

M&S victorious in £3.5m VAT bunfight