Teacake controversy

April 10, 2008 7:12 PM

I suppose I ought to declare an interest in this story - I not only love lower, simpler taxes, I love chocolate teacakes. Even if I didn't, though, this would stand out as a ridiculous example of the problems a complex tax system brings.Chocmarshmallow


The very fact that there has been a costly wrangle going on for years about the relative tax status of the chocolate teacake as regards to being a biscuit or a "traditional bakery product" should be a compelling sign that we have an overly complex tax system. The "brief" summary on the BBC web site takes over 160 words and a 2 by 3 tabulated explanation. Unfortunately, it's not just a laughable tale about a tasty product, it's been a very costly saga for all involved - consumers, Marks and Spencer's and the taxpayer.


One interesting thing to note is that the headline is "Teacake set to cost taxman £3.5m". This is utterly wrong - this judgement won't cost the taxman a penny. He will continue to receive his wages and unjustified performance bonuses regardless. The only people who have lost out in this are you and I - people who were wrongly charged tax when they bought teacakes and who have footed the bill for HMRC's lengthy legal defence which they bizarrely continued on dubious grounds against M&S even after they had repaid supermarkets.


If we had a simple tax code - and tax officials who didn't view taxpayers' money as rightfully theirs to cling onto and splash about on lawyers on their every whim - none of this would have needed to happen, taxpayers wouldn't have had to foot a massive legal bill and, most importantly, we could all have enjoyed cheaper chocolate teacakes.

I suppose I ought to declare an interest in this story - I not only love lower, simpler taxes, I love chocolate teacakes. Even if I didn't, though, this would stand out as a ridiculous example of the problems a complex tax system brings.Chocmarshmallow


The very fact that there has been a costly wrangle going on for years about the relative tax status of the chocolate teacake as regards to being a biscuit or a "traditional bakery product" should be a compelling sign that we have an overly complex tax system. The "brief" summary on the BBC web site takes over 160 words and a 2 by 3 tabulated explanation. Unfortunately, it's not just a laughable tale about a tasty product, it's been a very costly saga for all involved - consumers, Marks and Spencer's and the taxpayer.


One interesting thing to note is that the headline is "Teacake set to cost taxman £3.5m". This is utterly wrong - this judgement won't cost the taxman a penny. He will continue to receive his wages and unjustified performance bonuses regardless. The only people who have lost out in this are you and I - people who were wrongly charged tax when they bought teacakes and who have footed the bill for HMRC's lengthy legal defence which they bizarrely continued on dubious grounds against M&S even after they had repaid supermarkets.


If we had a simple tax code - and tax officials who didn't view taxpayers' money as rightfully theirs to cling onto and splash about on lawyers on their every whim - none of this would have needed to happen, taxpayers wouldn't have had to foot a massive legal bill and, most importantly, we could all have enjoyed cheaper chocolate teacakes.

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