British snack food manufacturer Walkers is facing a notable tax setback as a tribunal has ruled that its mini poppadoms should not be exempt from VAT and should be treated as crisps. The decision has sparked a debate over the classification of these bite-sized snacks, drawing parallels with previous VAT disputes involving Pringles and flapjacks.
The tax tribunal’s ruling has declared that Walkers must pay VAT on its mini poppadoms, considering them more in line with crisps. This judgment could result in Walkers being hit with a substantial multimillion-pound tax bill, given that crisps, made from potato, attract a 20 percent VAT.
Walkers had argued that its Sensations Poppadoms should be exempt from the sales tax, asserting that they were not made from potatoes and were intended as a snack for dipping. However, the tax tribunal, presided over by judges Anne Fairpo and Sonia Gable, concluded that these “small, generally round, bite-sized objects” were essentially crisps in everything but name.
The tribunal’s decision was based on the fact that 40 percent of the ingredients in the poppadoms were “potato-derived,” incorporating elements like potato granules and potato starch. According to the judges, this potato content was deemed “more than enough” to fall under the VAT rule.
In a touch of humor, the judges dismissed the idea of “nominative determinism” in snack foods, stating, “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.”
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