And you thought health and safety law was quirky!

 If you thought so, spare a thought for your colleagues in accounts. The article below came from a Sage newsletter  - some strange but true quirks in relation to VAT

First levied in the UK on April Fools' Day 1973, VAT is now the government's third largest source of revenue after income tax and national insurance.

Now in its 40th year, what started out as a simple, easy to collect tax – imposed on most goods and services – has become increasingly complex with exemptions from everything from children's clothes to Jaffa cakes.

Every man for himself!

It turns out that not all gingerbread men are born equal. Gingerbread men with only two chocolate dots for eyes are zero rated, but adding any further chocolate decoration turns him into a luxury item at 20% plus VAT!

Is it a cake or a biscuit? According to HMRC, snowballs (marshmallow covered in chocolate) are classed as confectionery and therefore subject to VAT, but their biscuit based cousins, the teacake is VAT exempt – all because of that crunchy base.

And perhaps the most infamous VAT product - the Jaffa cake - was at the centre of a challenge over its status. Despite its name, Jaffa cakes are usually fine alongside biscuits. But when it comes to VAT, biscuits attract the tax whereas cakes – as a staple item – do not.

Jaffa cake manufacturer McVities went to court to establish its right to avoid charging VAT on its product and won.

Pasty – gate

Chancellor George Osborne seriously under estimated the public's love of pasties when he announced plans to levy standard rate VAT on the hot, freshly – baked takeaway. A U-turn soon followed in which the proposal was amended to allow food that was hot but cooling to continue to be zero rated.

Hence, pasties, pies and other hot takeaway food are zero – rated unless kept warm in the shop – for example, under a hot plate or in a cabinet, in which case it is standard – rated.

Thanks must go to sage for providing this somewhat tongue in cheek article and after reading it perhaps you are now feeling relieved that you became a health and safety professional.