VAT was introduced as a “simple tax” but since then it’s become so complicated that it’s been described as “a fiscal theme park in which factual and legal realities are suspended and inverted.” Sound like an exaggeration? Consider these ten strange facts about VAT…

1. Gingerbread men are classed differently according to their decorations. If a gingerbread man has two chocolate spots for eyes, then there’s no VAT on it, but any other chocolate decorations and VAT applies.

2. Goods that are stolen from a shop are not subject to VAT, though stolen cash is…

3. …but oddly, sales of counterfeit goods are subject to VAT, while counterfeit cash isn’t.

4. Orange squash, petrol, ice cream, and poodle food are rated as “luxuries”, while caviar, lap dances, and labrador food are not.

5. Bumblebees are taxed under VAT, while honey bees are not.

6. Chocolate covered shortbread is subject to VAT, but if you add a layer of caramel and make it Millionaire’s shortbread, it’s not.

7. Ferrets are considered to be pets under VAT legislation, but rabbits are not.

8. Most nuts that are sold still in the shell are zero-rated, while those out of their shells attract the tax.

9. Physical publications are exempt from VAT, but ebooks are not.

10. And of course, there was the famous Jaffa cake debate, in which Upper Tribunal judges decided that a Jaffa cake was in fact, a cake, meaning it’s taxed differently than it would be if it were a biscuit.

 

Got any strange tax facts to share with us? Tell us below in the comments!

 

Posted by Rachel Allen

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