Walkers, a British snack food company, is facing a difficult issue when a tax tribunal declared that its little poppadoms are not VAT-free and must be classed as crisps. The discussion about the nature of these bite-sized snacks has raged, drawing parallels with previous VAT disputes over Pringles and flapjacks.
A British judge ruled that the corporation must pay VAT on its little poppadoms, deeming them more equivalent to crisps. Walkers may face a multimillion-pound bill as a result of this verdict, as potato snakes are subject to 20% VAT.
The maker argued that Sensations Poppadoms should be exempt from sales tax because they were not made with potatoes. It was described as a dippable snack.
However, the tax tribunal, chaired by judges Anne Fairpo and Sonia Gable, determined that these “small, generally round, bite-sized objects” were crisps in all except the name.
The tribunal’s decision was based on the fact that 40% of the ingredients in the poppadoms were “potato-derived,” which included potato granules and potato starch.
According to the judges, the potato content was “more than enough” to trigger the tax requirement.
In a hilarious twist, the judges rejected the concept of “nominative determinism” in snack foods. “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,” judges Anne Fairpo and Sonia Gable said.
Similar to crisps in appearance and taste
The judges were unconvinced by Walkers’ claims, claiming that Sensations Poppadoms had an appearance and texture akin to potato crisps.
“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.”
Walkers has the ability to appeal the crispy verdict.
