VAT, Strawberries, Cream, and Courtrooms

You might think of strawberries and cream as the taste of summer, a Wimbledon staple, or a picnic treat, not the stuff of legal wrangling. Yet here we are, with Marks & Spencer squaring up against HMRC over VAT on their strawberries and cream sandwich.

Yes, a sandwich is at the centre of a tax dispute. And no, this isn’t a sketch from a legal comedy. It’s real, it’s technical, and it’s a brilliant example of how peculiar VAT law can get when food is involved.

The Sandwich in Question

M&S have launched a limited-edition strawberry and cream sandwich, sweetened bread, clotted cream, flavourful red diamond strawberries. It’s packaged the same as a sandwich and sold in the sandwich food on the go section

But HMRC wasn’t interested in flavour. They will be looking at this concoction and see a standard-rated product, not a zero-rated one. And that’s where the issue begins.

VAT and Food: A Minefield of Logic

In VAT law, most food is zero-rated. But not all food. Items like confectionery, ice cream, crisps, and drinks are standard-rated. Let’s begin by considering what is meant by “confectionery” and “cake”. The VAT legislation states that the term “confectionery” includes items such as chocolates, sweets and biscuits as well as “any item of sweetened prepared food which is normally eaten with the fingers”.

So when a product sits in between, a sweet filling in sandwich packaging, it raises questions. Is this lunch? Or is it pudding? HMRC may argue it’s closer to a dessert, designed to appeal as a treat. If so, the zero-rating doesn’t apply.

The law doesn’t clearly define a sandwich, and that vagueness leaves space for disagreement. M&S points to the packaging, the format, and its placement in stores. HMRC may look at customer behaviour and see people buying it with lunch, not as lunch

Why HMRC Might Challenge It

HMRC watches for inconsistencies in VAT treatment. Sweet food products dressed up as something else are a red flag, especially when they’re being sold without VAT. HMRC will see this as a loss in revenue

By challenging this, HMRC defends the integrity of VAT rules. It also sends a message: retailers shouldn’t assume something gets zero-rated just because it looks like a sandwich. If it tastes like dessert and acts like dessert, it might be taxed like dessert.

A Long Tradition of Food VAT Fights

The M&S strawberry sandwich isn’t the first quirky item to catch HMRC’s attention, and it won’t be the last. UK VAT law zero-rates most food for human consumption (as set out in Schedule 8, VAT Act 1994), but a long list of exceptions, confectionery, crisps, ice cream, hot takeaway food, and more are standard-rated at 20%. The tricky part is working out which category a product really belongs in.

That question has led to some memorable courtroom showdowns:

• Walkers Popadoms: Walkers argues their popadoms are closer to Indian accompaniments than potato crisps, and should be zero-rated. HMRC says they belong with standard-rated snacks due to their packaging and shelf placement. The case is ongoing, and the outcome could affect a wide range of ethnic and specialist foods.
• Jaffa Cakes (1991): McVitie’s wins a now-iconic case by convincing the court that Jaffa Cakes are cakes, not biscuits. The fact that they go stale like a cake helped seal the decision and secured a zero-rating.
• Greggs Sausage Rolls: Greggs avoids VAT on sausage rolls by selling them cold. Since hot takeaway food is standard-rated, this clever shift in how products are served keeps them in the zero-rated category.
• Pringles: Procter & Gamble argues that Pringles aren’t technically crisps due to their shape and composition. But their potato content and how consumers see them lead the court to rule they are crisps, standard-rated.
• Mega Marshmallows (2024): Innovative Bites Ltd successfully argues that their extra-large marshmallows are meant for cooking (think barbecues and baking), not casual snacking. That distinction wins them zero-rating status.
• KFC Dip Pots (2024): A tribunal rules that dips included in meal deals aren’t standalone food items but part of a bundled supply. That means they fall under the standard-rated category along with the rest of the meal.

These cases highlight how VAT law, when applied to food, often relies on subtle distinctions, what something looks like, how it’s sold, how it’s eaten, and what customers expect. The strawberry sandwich may seem like a novelty, but it fits perfectly into this strange and growing tradition.

Match Point

At first glance, the case seems absurd. But it captures how complex VAT becomes the moment food gets creative. Definitions stretch, tax boundaries blur, and something as simple as clotted cream on bread becomes a matter for legal debate.

So HMRC and Marks and Spencer’s will go to court. And as history shows, it’s never just about the snack. It’s about what it represents in tax law.

So next time you spot a quirky sandwich in the meal deal aisle, remember someone, somewhere, is wondering if it’s really a sandwich… or a standard-rated sugar trap.

If like us you are intrigued by this keep an eye on HMRC court rulings – we will be keeping you updated on our socials: Facebook Instagram and LinkedIn

Got a VAT questions get in touch with the team today here