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£3.5m legal victory for M&S over VAT cake
Ed Harris04.02.09
MARKS&SPENCER won a 13-year legal battle today over the legal status of its chocolate-covered teacake.
The victory could be worth £3.5million to M&S after three law lords backed a decision by the European Court of Justice which should result in a refund of wrongly paid VAT. The battle centred on whether the confection should be classed as a biscuit and therefore subject to VAT or a cake and be exempt.
Last April the European court ruled it was a cake and ordered the Inland Revenue to make a full refund. It could still have been open to the Revenue to challenge that ruling but today's verdict means it will have to throw in the tea towel.
