Tasty tax law: Walkers’ poppadoms are actually crisps, judge rules

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By Rhys Duncan on

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VAT issue


A court has found that Walkers’ Poppadoms are crisps, and not in fact the popular Indian starter for the purposes of tax law.

The ruling, which will result in VAT being due on the Walkers product, was handed down by judge Anne Fairpo in the First-Tier Tribunal Tax Chamber earlier this month after being heard in June of last year.

Walkers, part of food and drinks giant PepsiCo, put forward a range of creative arguments as to why their product shouldn’t come within the category of “potato crisps, potato sticks, potato puffs, and similar products made from the potato, or from potato flour, or from potato starch”.

Whilst it was suggested that the name ‘poppadom’ should put the product beyond the reach of VAT, the tribunal weren’t persuaded. “Nominative determinism is not a characteristic of snack foods,’ Fairpo said, following up with the comment that “calling a snack food “Hula Hoops” does not mean that one could twirl that product around one’s midriff, nor is “Monster Munch” generally reserved as a food for monsters.”

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The tribunal was equally unimpressed by the suggestion that the poppadoms have a distinct flavour, separate from crisps. “In a world which contains crisps with flavours as diverse as hedgehog, haggis, sweet chilli, sour cream, and ‘cheese & port’, we are not convinced by the argument that there are any flavours which could be said to be distinct from those used for potato crisps.”

Similarly, neither the shape nor texture were enough avoid tax liability. “The products were described as being shaped to make it easier to pick up chutney or dips, compared to potato crisps. In practice, we did not consider that they were significantly different to potato crisps with regard to their ability to convey dips etc”, the tribunal concluded.

And, whilst “the products are crunchy at the first bite; they then become somewhat softer thereafter although they did not dissolve completely in the mouth. We did not consider that they were significantly different to comparator potato crisps provided for us to test.”

Even the argument that the font on the packaging was “evocative of Indian text” couldn’t save the company from VAT, the tribunal holding firm that this wasn’t a sufficient distinction from other Walkers crisps.

Whilst authentic poppadoms are made from gram flour, the Walkers variation use a significantly larger amount of potato granules, potato starch, and modified potato starch, distinguishing them from the popular Indian starter that is exempt from VAT.

Other exempt snacks include Skips, Twiglets, Doritos, and, famously, Jaffa Cakes.

2 Comments

Tax Rocks

Goimg back to a legal cheek article last year about which speciality of lawyer practice has the smartest lawhers, I think this confirms that, per that article, tax lawyers are the smartest.

Nuh uh

Ratio

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