Image of Jaffa Cakes

The VAT treatment of Jaffa Cakes explained

10 March, 2026

In a recent social media poll, we asked whether you pay VAT on Jaffa Cakes. 68% said no, while 32% weren’t so sure. The answer comes down to a surprisingly important question: are Jaffa Cakes biscuits or cakes? 

  • Chocolate-covered biscuits are considered a luxury item, so 20% VAT is payable. Biscuits that are not covered in chocolate have no VAT. 

  • Cakes, however, are considered staple foods, so no VAT is payable, even if they are covered in chocolate. 

This distinction was crucial for Jaffa Cakes, which are partially covered in chocolate. If they were considered biscuits, 20% VAT would apply. If they are cakes, no VAT is payable. 
 

The debate even reached the courts in 1991 when McVitie’s had to defend their iconic treat. Customs and Excise argued that Jaffa Cakes were biscuits, citing their small size, packaging, and the way they are eaten. It’s true—they do have some characteristics of a biscuit. 
 

However, Jaffa Cakes also have characteristics of a cake. In a memorable courtroom moment, McVitie’s famously baked a giant Jaffa Cake to prove a key point: cakes go hard when stale, biscuits go soft. Jaffa Cakes go hard—just like a cake! 
 

The court ultimately agreed. Jaffa Cakes were officially classified as cakes, meaning no VAT is payable. 


So the next time you reach for this sweet treat, remember: it’s a cake, not a biscuit! 

To explore all the resources, daily content, and ways to get involved during Tax Awareness Week 2026, visit the Tax Awareness Week webpage - and watch out for new content being added every day throughout the week!