VAT-a-shocker: British court rules Walkers' Poppadoms are potato chips, to attract sales tax

British snack food manufacturerWalkers is facing quite a situation as a tax tribunal ruled that its mini poppadoms are not exempt from VAT and must be treated as crisps.The debate over the nature of these bite-sized snacks has unfolded, drawing parallels with past VAT battles involving Pringles and flapjacks.

A British judge has declared that the company must pay VAT on its mini poppadoms, considering them more akin to crisps.This ruling could leave Walkers facing a hefty multimillion-pound bill, as potato snackshave a 20 percent VAT.

The manufacturer had contended that its Sensations Poppadoms should be exempt from the sales tax, arguing that they were not made from potatoes. It said that it is meant as a snack for dipping.

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However, the tax tribunal, led by judges Anne Fairpo and Sonia Gable, concluded that these "small, generally round, bite-sized objects" were crisps in everything but name.

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The tribunal's ruling hinged on the fact that 40 percent of the ingredients in the poppadoms were "potato-derived," including potato granules and potato starch.

According to the judges, this potato content was "more than enough" to fall under the tax rule.

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In a humorous touch, the judges dismissed the idea 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.

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Similar to crisps in appearance, taste

Unconvinced by Walkers' arguments, the judges asserted that Sensations Poppadoms were strikingly similar to potato crisps in appearance and texture.

“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 right to appeal against theverdict.

(With inputs from agencies)