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A judge has ruled that Walkers’ poppadoms are crisps rather than the popular Indian food, as the company lost at a tax tribunal.
The decision was handed down last week after the company argued that the treats should be classed as a food rather than a snack for VAT reasons, potentially saving millions of pounds a year.
The tribunal ruled that snacks are “similar to potato crisps” and so are not eligible for zero-rated VAT. As a result, Walkers will have to continue to pay the standard 20 per cent VAT on the products.
Walkers will have to pay millions more in tax every year after losing at a tax tribunal
(Dan Taylor/CreativeCommons)
In the ruling documents, it was seen that Walkers claimed that its mini-poppadoms were not crisps as they used potato granules and had distinct flavours that were unusual for crisps.
The snacks come in an assortment of flavours including lime and corriander chutney and mango and red chilli chutney.
However, in her ruling, tribunal judge Anne Fairpo said: “In a world which contains crisps with flavours as diverse as hedgehog, haggis, sweet chilli, sour cream, and cheese and 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.”
The company also argued that the crisps were “closer to a poppadom, being intended to be eaten with an Indian-style meal”, rather than alone as a traditional crisp would be.
Walkers crisps
(PA Archive)
Walkers also argued that they were indeed not a crisp as they were named “poppadoms, unlike potato crisps”.
In response, Judge Fairpo said: “Nominative determinism is not a characteristic of snack foods. 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.”
Lawyers also argued the snacks should be considered poppadoms due to the inclusion of gram flour, which is used in the genuine product.
However, the judge found that gram flour only made up around 14 per cent of the product and there was much more potato included.
The tribunal dismissed the appeal and ultimately in its ruling, the panel concluded: “Having concluded that the products are made from the potato and potato starch, it is therefore irrelevant whether the products are similar to poppadoms. What matters is whether they are similar to potato crisps.”
McVitie’s took HMRC to court over a decade ago to argue that Jaffa Cakes were cakes rather than biscuits to save considerable cash on VAT.
The Independent has contacted Walkers for a comment.
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