Sweet victory as retailer wins battle over chocolate teacakes
Sweet victory belonged to Marks & Spencer after the retailer won backing from the European Court of Justice in a 13 year battle over teacakes.
It’s taken more than a decade for M&S to convince HM Revenue and Customs that chocolate teacakes are in fact cakes, not biscuits and therefore VAT does not apply.
The European Court of Justice has now ruled that the retailer ‘had been treated in a discriminatory fashion’ compared to other food retailers and was entitled to a full repayment amounting to almost £3.5 million.
"The national court must, in principle, order the repayment in its entirety of the VAT repayable to the trader who has suffered discrimination in order to provide compensation for the infringement of the general principle of equal treatment, unless there are other ways of remedying that infringement under national law." said a court spokesperson.
It will be left to British judges to decide whether the retailer can recover the money. However, the victory may be academic because of the argument that paying M&S £3.5m will "unjustly enrich" the retailer as it was in fact the customers that had paid the VAT.
The case is now with the House of Lords.
April 15, 2008
|