Monday, July 07, 2008

Something completely different

As a break from all this changing the world, the wonderful Lex Ferenda has drawn my attention to this:

. when is a crisp not a crisp? When it's a Pringles!



No this isn't IPKat

See Procter & Gamble v HMRC [2008] EWHC 1558 (Ch) and in particular the glorious write up here.

Food gets a 0% VAT rate. But potato chips and potato crisps get 17.5% VAT food as "snack food", the case explains. Where do Pringles fall? According to Pringles, they are zero rated, because unlike crisps, they come in a tin and contain potato flour as well as potatoes! ((And also unlike crisps, are horrible and smell, says Pangloss - but without prejudice..)

This might make you think, says Daithi, that that " the intention was to classify food like potato crisps as non-zero for policy reasons. But the judge says (perhaps with tongue in junk-filled cheek), in dismissing Revenue’s policy arguments (that the idea of denying the zero rate to potato crisps was an anti-junk food policy):

[The Tribunal below accepted] that in general the intention of Parliament was to standard-rate food that was not purchased primarily for the purpose of nutrition. However, one must be very careful about reading too much into the statutory provisions. It cannot, in my view, be said that the legislation shows a clear policy to tax “junk food”. What difference, one might ask, is there between a turnip crisp and a potato crisp in terms of its “junkiness” or otherwise? One might think that the answer is very little and yet the former is zero-rated and the latter standard rated. It is not difficult to multiply examples of that sort. There are plenty of “junk foods” which do not fall within any of the exceptions from zero-rating for food; there are also examples of healthy foods which are standard rated, for instance freshly squeezed orange juice available in supermarkets which falls within excepted item 4.

Indeed, extracted from the judgement (summarised by me, actual listing in appendix to judgement), we can see that Pringle-buyers are also likely to buy other zero-rated products such as KP Skips (no longer with potato ingredients), Doritos, Quaker Snack-a-Jacks, Jacobs Twiglets and Mini Cheddars (biscuits) or standard-rated products such as Monster Munch (no potatoes but content made from “swelling cereal” which attracts standard rate); McCoys (conventional potato crisps); KP Hula Hoops (because of potato flour); Walkers’ Quavers (potato flour); Walkers’ Potato Heads (with actual potato)."

Daithi is of course, Irish and thus inherently pro-potatoes. He is also emerging as the Charlie Brooker of IT law:-)

3 comments:

Daithí said...

Ooh, I like that, "the Charlie Brooker of IT Law", I think I'll get it on my new business cards...

And I promise to post about the evil EP stuff this evening.

Andy Stone said...

Excellent pic. first thought was: that's taking Donoghue to extremes...

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