When is a sandwich not a sandwich? It’s a question that M&S and HMRC are currently in dispute over as the major supermarket rolls out a limited-edition strawberries and cream sandwich.
It might sound like a minor detail, but the discrepancy could influence whether M&S is subject to pay a 20% tax on the product.
The sandwich is inspired by the ‘viral Japanese fruit sando’ and, true to form, has indeed gone viral on social media over the last week. Launched just in time for Wimbledon, it consists of fresh strawberries and whipped cream cheese between two slices of sweetened bread, and is the first time a strawberry sandwich has graced the shelves of a UK supermarket.
Commenting on the inspiration behind the product, M&S said: ‘Inspired by the Japanese sweet sandos, recently spotted popping up in London’s trendiest Japanese patisseries, our product developers have long dreamed of creating a dessert sandwich.’
But the real question everyone is asking: is it a cake or sandwich? The debate is being called to attention by the taxman because, while sandwiches are subject to a zero-tax status, confectionary items are liable for the standard 20% VAT.
HW Fisher’s VAT manager Simon Knivett says that the product could be infringing on a 1980s legislative amendment. He says: ‘If the bread is sweetened and designed to be eaten with fingers, the case for classifying it as confectionery is surprisingly strong.'
HMRC defines a dessert as: ‘Any form of food normally eaten with the fingers and made by a cooking process, other than baking, which contains a substantial amount of sweetening matter.’
This is not the first time a debate like this has been called into question. In 1991, Jaffa Cake participated in a legal battle with HMRC over whether their hero product is, in fact, a cake or a biscuit.
The sandwich is retailing for £2.80 in M&S stores, but the supermarket has yet to disclose whether that includes VAT in its price. So, the jury's still out on this one, but we'll be updating this page as the story progresses. Keep your eyes peeled for more.
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