HMRC internal manual

VAT Food

VFOOD6200 - Excepted items: Confectionery: The bounds of confectionery, sweets, chocolates, chocolate biscuits, cakes and biscuits: The borderline between confectionery and cakes

Cakes, whether or not covered with chocolate, are excluded from the terms of excepted item 2, and are therefore zero-rated as food. Cakes includes sponge cakes, fruit cakes, pastries, éclairs, meringues and jaffa cakes. Though there is no accepted definition of the word, cakes often made from a thin batter containing flour and eggs, and aerated in the process of cooking.

In most cases, the borderline between cakes and confectionery causes few problems, but there are products whose status ascakes is not self-evident. They will normally be marketed as cakes, through bakeries and supermarkets rather than through confectionery outlets, and will be displayed with cakes and biscuits rather than in the confectionery section. The style of packaging used will also normally follow the pattern for bakery products, with a number of individual portions boxed and cellophane wrapped so the contents are revealed. They are also usually eaten as part of a meal rather than between meals as confectionery.

An example of a product which could not easily be categorised was considered by the tribunal in the case of Goodfellow and Steven Ltd (EDN/87/0010). At issue was the question of whether chocolate violets and chocolate marzipan walnuts were cakes or other confectionery. At the time, excepted item 2 standard-rated other confectionery (not including cakes) wholly or partly covered in chocolate or some product similar in taste and appearance. The products had a base of baked nut meringue, with buttercream piped onto the top, covered with a chocolate-like substance, and having a shelf life of two weeks boxed or one week in the open.

The tribunal found that there were no objective tests which can be applied to determine whether something is a cake and relied on their idea of the impression which would be made on the average man in the street. They did not find the absence of flour in the recipe conclusive: the products were made by skilled bakers and the average man having eaten them would have considered them to be cakes. The appeal was allowed and the products were zero-rated.

The following products, described below, are all zero-rated as cakes:

  • flapjacks
  • chocolate crisp cakes (‘crunch’ cakes)
  • caramel shortcake
  • marshmallow teacakes
  • lebkuchen
  • traditional Japanese sweetmeats.

Asian sweetmeats are also zero-rated as cakes: see VFOOD9900.


It is our policy that there is a difference between flapjacks and cereal bars. This policy development arose because, at the inception of VAT, flapjacks were widely accepted as cakes, and cereal bars were not widely available, if at all. Flapjacks were accepted as being a cake of common perception and widespread home-baking, not because of any specific reasoning behind such factors as their recipe, ingredients or the manufacturing process.

However, since that time, the difference between flapjacks and cereal bars has narrowed due to the development of cereal bars and their current proliferation on the market. The amendment to the law in 1988 was made to bring products, particularly cereal bars, within the scope of the standard rate by defining confectionery as sweetened items of prepared food normally eaten with the fingers. As a result cereal bars were standard-rated as long as they are sweetened.

The problem that has arisen is that a flapjack is, historically, accepted as a cake, but should probably now be categorized as a cereal bar, and therefore standard-rated, within the legislation.

VAT treatment of flapjacks

We therefore define flapjack narrowly, as it is intended to only apply to that product as it was at the inception of VAT. We allow the zero-rating of standard flapjacks along with minor variations, for example when ingredients like dried fruit, raisins, chocolate chips etc are added. We view the addition of toppings similarly, such as with a layer of chocolate or yoghurt.

We draw the line between flapjacks and cereal bars at any alteration to a flapjack that takes it into the category of being a cereal bar. We interpret this with our policy that a traditional flapjack consists solely of oats. The addition of other cereals to the product turns it into a cereal bar, as it is no longer a traditional flapjack.

It is difficult to draw a borderline between the two products, as flapjacks could easily be viewed as cereal bars. However, the above policy is, we believe, fair and reasonable while being consistent with the law and with the development of the policy since the inception of VAT.

More recently, this borderline was examined by the tribunal in the case of Torq Ltd (V.19389). This case considered a cereal bar that was claimed to be either similar to a flapjack or a cake. Accordingly it is relevant to this subject area.

Chocolate crisp cakes (crunch cakes)

These are made of breakfast cereals such as Rice Crispies or corn flakes covered in chocolate or carob and pressed into a round flat cake or cut into bars.

Caramel shortcake

These consist of a shortbread base covered with a layer of fudge or caramel and a chocolate topping, normally cut into individual bars. Two appeal cases concerning very similar versions of this product gave contradictory rulings. Following the latter of the cases of Good Taste (EDN/88/0030) and Marks and Spencer (LON/88/1316Y), it was accepted that caramel shortcake was zero-rated. This product is also commonly sold as millionaire’s shortcake.

However, chocolate-covered shortbread biscuits are standard-rated.

Marshmallow teacakes

Marketed under a variety of names, such as munchmallows, mallow cakes, teacakes, coconut mallows etc, these consist of a cake or crumb base topped with a dome of marshmallow coated in chocolate or carob, sugar strands or toasted coconut, and may be individually wrapped in foil. They have been traditionally accepted as cakes.


Small pieces of chocolate covered gingerbread, these look similar to sweets and are often packed like confectionery, but are in fact small cakes.

Traditional Japanese sweetmeats

These are cakes or biscuits and are zero-rated (unless they are biscuits covered in any way in chocolate or a product similar in taste and appearance).