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HMRC internal manual

VAT Food

HM Revenue & Customs
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Excepted items: Confectionery: The borderline between confectionery and biscuits

As with cakes, there is no all-inclusive definition of the term biscuit. Biscuit generally refers to a product made from wheat flour, fat and sugar in a fairly stiff (rather than runny) dough which is generally cut or rolled for baking, with low moisture content giving a crisp consistency. It has a long shelf life of several months and goes soft when stale. The main borderline problem between confectionery and biscuits has been with products which contain an element of biscuit together with other ingredients, and on this question the tribunals have not generally been concerned with the technical details of biscuit manufacture.

Wafer products Ice cream wafers are accepted as biscuits, including those containing a sweet filling, often known as

nougat wafers and oysters. This means that, when sold wholesale, they are zero- rated unless covered with chocolate or a similar covering. When sold retail as part of an ice cream, the whole is regarded as a single standard-rated supply.

Wafer confectionery, comprising a wafer case with a sweet filling, to be eaten on its own rather than as part of (for example) an ice cream, is likely to be zero-rated as a biscuit.

In the first tribunal case of Kathy’s Kones Ltd (MAN/93/0994), the Chairman made it clear that a product is not a biscuit just because it contains an element of biscuit in its structure. The products considered in this case were traditional ice cream cones with a marshmallow filling. On the basis of appearance, the tribunal found that they were confectionery and were not biscuits. However, both parties agreed to have the issue heard again before the tribunal (LON/96/1726). The tribunal adopted the principles identified in the Ferrero Tribunal decision; and having considered the facts, and seen and tasted the cones, concluded that the man in the street would regard them as biscuits. Although the original decision has not been quashed, we have accepted the findings in this latter case.

Petits fours Petits fours are small cakes, biscuits, chocolate covered nuts, or other items of confectionery. Assortments must be dealt with under the apportionment rules set in

Notice 700 The VATGuide. See also VFOOD7400.