Marks & Spencer’s Strawberry Sandwich: A Case Study in VAT, Legal Classification, and Commercial Risk

Words by Law City Intern, Sabyia Ahmed

In July 2025, Marks & Spencer released a new product to coincide with the Wimbledon tennis tournament: the Strawberries & Cream Sandwich. Sold for £2.80 in stores nationwide, the product consists of soft white bread sweetened with sugar,strawberries, and whipped cream cheese. While described by the company as a "dessert sandwich"

and marketed in a playful, seasonal manner, it was placed alongside traditional savoury sandwiches on the shelf. This decision to market and position the product in such a way has prompted scrutiny from tax experts and regulators alike.

At first glance, this might appear to be a novelty food story that garnered attention for its creativity and cultural relevance. However, the product has now become the subject of a wider legal and financial question: should it be classified as a standard sandwich, or as confectionery for the purposes of VAT? The outcome of that question may have significant consequences not only for Marks & Spencer but also for how law firms support businesses in interpreting regulation, managing compliance risk, and structuring commercial transactions.

This article will examine the legal and tax implications of this case in depth. It will also

explore how this issue connects to broader themes in legal practice, including statutory interpretation and due diligence in corporate transactions. By unpacking the case of the M&S strawberry sandwich, we can better understand how seemingly minor current events can have a substantial impact on legal advisory work, particularly in areas such as tax, regulatory compliance, and mergers and acquisitions.

Understanding the Legal Issue: What Determines a Sandwich?

The legal question at the centre of this case is whether the M&S strawberry sandwich qualifies for the zero-rated VAT treatment applicable to most cold food intended for immediate consumption, or whether it falls into the category of confectionery, which is subject to a twenty percent VAT charge.

Under current VAT legislation in the United Kingdom, most food is zero-rated. However,

specific categories of food are excluded from this exemption. One such category is confectionery. HM Revenue and Customs defines confectionery as "any form of food normally eaten with the fingers and made by a cooking process, other than

baking, which contains a substantial amount of sweetening matter." This definition is a crucial component in determining whether a product is subject to the standard VAT rate.

In the case of the strawberry sandwich, there are several features that might place it within the scope of this definition. The bread is sweetened, the filling consists of a fruit and cream cheese combination typically associated with desserts, and the sandwich is intended to be eaten by hand. Simon Knivett, a VAT expert at HW Fisher, noted in the Evening Standard that the sweetened bread and finger-held format present "a surprisingly strong case" for the sandwich to be classified as confectionery rather than a traditional meal option

(Standard).

If HMRC were to classify the product as confectionery, Marks & Spencer would not only

be required to charge VAT on future sales, but it may also face backdated VAT assessments for sales already made.

Relevant Case Law: Lessons from Jaffa Cakes and Marshmallows

This is not the first time UK courts have been asked to determine how a food product should be categorised for tax purposes. One of the most famous cases is the 1991 tribunal involving Jaffa Cakes, produced by McVitie’s. In that case, HMRC argued that Jaffa Cakes were chocolate-covered biscuits and should therefore be taxed. McVitie’s countered that the product was in fact a cake, which would make it exempt from VAT. The court examined several features of the product, including its texture, how it aged over time, and how it was typically consumed. Ultimately, the court ruled in favour of McVitie’s,establishing that Jaffa Cakes were indeed cakes and therefore not subject to VAT.

A more recent and directly relevant case involves “mega marshmallows” sold by Innovative Bites Ltd. These were marketed as being suitable for roasting over barbecues, and the company argued that the product should not be treated as confectionery for VAT purposes. The case eventually reached the Court of Appeal, which issued its judgment on 21 March 2025 in Revenue & Customs Commissioners v Innovative Bites Ltd

[2025] EWCA Civ 293. The Court concluded that Note (5) of Schedule 8 to the VAT Act must be interpreted as determinative. According to Note (5), sweetened prepared food typically eaten with the fingers is categorised as confectionery, unless such a classification would result in an absurd outcome. The Court found that the Upper Tribunal had been wrong to treat the provision as a flexible presumption rather than a clear rule. As a result, the matter was referred back to the First-tier Tribunal to assess whether the

marshmallows in question were normally consumed in the manner described. (Browne

Jacobson).

In light of these precedents, Marks & Spencer may find it difficult to argue that their strawberry sandwich should fall outside the category of confectionery, particularly if HMRC can demonstrate that the product meets the factual requirements laid out in Note (5).

Why Confectionery Is Taxed Differently

The rationale behind VAT being applied to confectionery and similar items stems from a

combination of economic, social, and public health considerations. VAT is intended to be a tax on consumption. While most staple foods are exempt to avoid placing a disproportionate burden on lower-income households, items considered to

be luxuries, treats, or non-essential goods are subject to the standard rate of VAT.

There is also a public health dimension to this policy. Taxing sweet and sugary foods may

discourage excessive consumption and help combat issues such as obesity and diabetes. By making such products slightly more expensive, the government aims to steer consumer behaviour towards healthier choices.

The Role of Statutory Interpretation

The M&S case is ultimately a matter of statutory interpretation, a skill fundamental to all areas of legal practice. Disputes of this nature often arise not because the law itself is missing, but because the words used by Parliament are open to more

than one interpretation. Some critics argue that lawyers are overly technical in how they approach such language. Others contend that legislation is

frequently drafted without enough clarity or

foresight.

Whichever side one takes, the consequence is the same: when the words of a statute leave room for doubt, the courts must step in to interpret their meaning. In VAT law, these interpretations can be the difference between a zero-rated product and one that attracts a twenty per cent tax burden. In practical terms, this can translate into millions of pounds in tax liabilities or refunds.

Financial Implications for Marks & Spencer

If the strawberry sandwich is ultimately reclassified as confectionery, the financial

consequences for Marks & Spencer could be significant. Based on the product's price of £2.80, a twenty per cent VAT charge would amount to approximately forty-seven pence per sandwich.

Given the product’s nationwide rollout and its inclusion in meal deals, it is reasonable to assume that millions have already been sold. Even a conservative estimate would place the potential backdated VAT liability in the tens of thousands of pounds.

In addition to the tax itself, HMRC may also seek to impose interest on the unpaid amounts. If HMRC determines that the misclassification was the result of negligence rather than an honest mistake, penalties could also be applied. This would further increase the financial exposure for the company.

Implications for Law Firms and Legal Practice

While the immediate consequences of this case fall on Marks & Spencer, the broader implications are highly relevant for legal professionals. Law firms advising clients in the retail, food, and consumer goods sectors must remain aware of changes in HMRC practice and recent case law. A shift in interpretation, such as that reflected in the mega marshmallows decision, can materially alter a company’s tax position.

For corporate lawyers and transactional teams, the case illustrates the importance of thorough due diligence in mergers and acquisitions. If a target company has misclassified its products for VAT purposes, the acquiring company could inherit substantial tax liabilities. This can affect the purchase price, the structure of the transaction, and the need for indemnity protections.

More broadly, legal teams need to consider how their clients market and describe their products. Seemingly minor choices in product packaging or promotional language can influence how a product is classified under VAT law. Advising clients on how to minimise these risks is now an essential part of providing full-service legal counsel.

Conclusion

The M&S strawberry sandwich may have begun as a light-hearted seasonal offering, but it now represents a serious legal and commercial issue. Its classification under VAT law could lead to substantial tax liabilities for the company, and the outcome of this case will likely be watched closely by others in the industry. For law firms, the case is a reminder that developments in current affairs can have immediate and profound implications for legal practice. Staying informed, responsive, and analytically rigorous is essential not just for resolving disputes, but for helping clients avoid them altogether.