M&S in war with Treasury over tea-cakes
Retailer to go to the ECJ to fight categorisation of its chocolate covered tea-cakes
In its second major European engagement of the year, Marks & Spencer is
set to go to the ECJ – over a tax rebate on its chocolate tea-cakes.
The House of Lords ruled yesterday that the ECJ should rule on whether M
&S was entitled to repayment of £3.5m in VAT paid on the tea-cakes over two
decades.
The argument hinges on whether or not the chocolate covered cakes are, like
most foods, zero-rated for VAT. Biscuits wholly or partly covered in chocolate
attract a standard VAT charge.
M&S is still awaiting a decision on its group relief claim before the ECJ
as well, with the advocate general having recently given a favourable opinion as
far as M&S are concerned.