Judge says Walkers’ Poppadoms are Crisps in VAT Case

Walkers must pay VAT on its Poppadoms after a judge ruled that they are crisps.

The manufacturer had argued that sales tax should not apply to its Sensations Poppadoms as they were not crisps.

Other foods subject to the levy include ice cream, chocolate-covered biscuits and cereal bars.

Under these tax rules, foods on that list attract 20% VAT, which can mean sellers have to pay millions of pounds.

Traditional poppadoms are zero-rated as they are deemed to be a restaurant food or one that requires further preparation rather than a packaged snack.

One previous VAT cases involved McVitie’s Jaffa Cakes in the 1990s. Tax authorities unsuccessfully argued they were biscuits.

In 2008, Marks & Spencer reclaimed £3.5 million in overpaid VAT on its chocolate teacakes following a 12-year battle that ended in Europe’s highest court ruling they were cakes and not a biscuit.

Walkers argued its mini poppadoms should not be classed as crisps because they were not made from potatoes and required preparation before consumption as they were designed for dipping in sauces or to have alongside a curry.

But a tax tribunal found the “small, generally round, bite-sized objects”, which were “somewhat wavy, with small bubbles on the surface”, were crisps in all but name as 40% of the ingredients were “potato-derived” including potato granules and potato starch.

According to the ruling, this was “more than enough potato content for it to be reasonable to conclude” that the products fell within the tax rule that stipulates a crisp was “made from the potato… or from potato starch”.

Tribunal judges Anne Fairpo and Sonia Gable 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.”

The judges were also unconvinced by the suggestion that Walkers’ Poppadoms were used in the same way to their crisp products.

“In practice, we did not consider that they were significantly different to potato crisps with regard to their ability to convey dips etc, particularly given that we consider that there is a practical limit to the amount of dip or chutney that most people are likely to want to combine with the crunch of the conveyor product.

“They are packaged and sold in a manner similar to potato crisps.”

“Removing them from their packaging, we consider that their appearance and texture is similar to potato crisps.”

The tribunal added that its Lime & Coriander Chutney and Mango & Red Chilli Chutney flavours were “not a distinguishing factor”.