The new Marks & Spencer strawberries and cream sandwich has gone viral on social media since its launch last week. However, whilst consumers are debating the flavours, accountants and lawyers are debating its tax classification – whether it qualifies for the same zero-rated tax treatment as most sandwiches or whether it should be subject to 20% VAT.
The limited-edition sandwich features sweetened bread filled with whipped cream cheese and strawberries, inspired by the Japanese “sando”.
Under current UK VAT legislation, most sandwiches are zero-rated. However, sweetened or confectionery-like items can be liable for the standard 20% VAT.
We tend to agree with a lot of public comment that it would be daft for HMRC to use taxpayers’ money to argue about whether a sandwich is a sandwich! Jim Winship, Director of the British Sandwich Association, seems to agree with us. He comments: “The strawberry sandwich is a mark of the creativity of the UK sandwich industry and why we lead the world in this market. It is also very definitely a sandwich.”
It remains to be seen whether HMRC will pursue any legal action. It seems to us that all this will do is curb innovation and put yet another barrier in the way of entrepreneurial UK food industry.