HMRC has launched a sustained campaign to widen the definition of ‘confectionery’ for VAT purposes, and the Courts are increasingly siding with them.

What began as isolated disputes over niche products has snowballed into a fundamental shift in how ‘sweet’ items are treated, with far-reaching consequences for food producers, wholesalers and retailers.

The outcome as established by the Courts in multiple decisions is clear: products long considered as zero-rated ‘cakes’ or similar baked goods are being reclassified as confectionery, subject to the standard rate of VAT at 20%. This difference can significantly impact margins, pricing strategies and even product viability.

The issue broke into mainstream conversation this summer when Marks & Spencer’s strawberry and crème ‘sandwich’ became a viral talking point.

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