The economics of bulk buying - Sally's Journal
The economics of bulk buying|
Not quite; it's the other way round. Plain biscuits are VAT exempt. Cakes are VAT exempt. But chocolate biscuits aren't; they are classed as "luxury items" and hence attract VAT at the standard rate.
McVities argued in 1991 that Jaffa Cakes were cakes and not chocolate biscuits, and they won. Hence Jaffa Cakes remain VAT free.