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Jaffa Cakes & their VAT exemption

Jaffa Cake is a popular (& controversial type) of cake in Great Britain. McVitie’s (United Biscuits) is a notable brand selling Jaffa Cakes. It is controversial in the sense of its classification: it is produced as a cake and becomes hard like a (chocolate-covered) biscuit when stale. Incidentally, the former is exempt from VAT while the latter is charged at 15%. This story is about how McVitie’s proved that their product was a cake and never paid VAT.

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