Posted Feb 10, 2005 by Presser1st
Not sure when it was but one member was correct in saying it was a VAT issue. You pay more VAT on biscuits than on cakes, I know there is another debate there but for now we'll stick with Cake/Biscuit. Well it went to court and McVities were extremely worried about it being classed as a biscuit because they would have had to pay back dated VAT amounting to ££££££££'s. So in defense to prove it was a cake the defense lawyer made a model jaffa cake so the jury could see it better, you guessed it he made a huge one that looked just like a "cake" and it got through as one, saving McVities huge amounts of backdated VAT!!
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Posted Feb 11, 2005 by Saiteko
This is not quite true. You do not have to pay VAT on biscuits but you do on cakes. Biscuits are classed as a neccesity food but cakes are classed as a luxury food. They found out that Jaffa Cakes were cakes because cakes go rotten but biscuits do not and the Jaffa Cakes went rotten!
Ah! The joys of VAT law... 
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Posted Oct 18, 2007 by mikeyc0312
Actually, biscuit and cakes are VAT free, but chocolate biscuits are a luxury item and so VAT has to be paid, so Mcvitie's took on a case to show that the Jaffa Cake goes hard when it goes stale, and is therfore a cake, not a biscuit. (Thanks to QI for the information)
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