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At £3.5m, they’re not just teacakes…

teacakes.JPGYep, £3,500,000 of taxpayers money – your money – is about to be presented to Marks & Spencers for some teacakes.

You may have thought that teacake expenditure would have decreased now John Prescott is no longer in Government, but there really is a very good reason for the increase.

In 1973, M&S decided to start selling teacakes, and the VAT man decided that they were biscuits, and so insisted on collecting VAT on them. The clue was in the name, really. They’re teacakes, not teabiscuits.

Then, a little over twenty years later, another VAT man realised that the teacakes were, in fact, cakes, and that VAT shouldn’t be collected on them. But between 1973 and 1994, £3.5 million pounds of VAT had been wrongly paid to the Government.

In its infinite wisdom, the government decided that this £3.5m shouldn’t be given back. They reasoned that people had paid for their teacakes, not to give a donation to M&S, and so to give the money back to M&S would be deeply unfair.

So they gave M&S a cursory 10%, and kept the rest for themselves.

Now, a further thirteen years later, the European Court has decided that this was a little unfair, and insisted that the government give the wrongly collected taxes back – costing us all £3.5m.

But then again, they weren’t just teacakes – they were M&S teackes.

This post was filed under: News and Comment, Politics.

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Comments and responses

Comment from Jonathan Rothwell


    11.15, 15/12/2007

It wasn’t just a government cock-up – it was a Conservative government cock-up.


Comment from sjhoward (author of the post)


    21.38, 16/12/2007

So true…




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