Following on from the recent introduction of the sugar levy on soft drinks, the possibility of a sugar tax on foodstuffs has been mooted. I have no qualms about the value of helping the consumer to make healthier choices by using the tax system. However, we already have a tax in place that differentiates between foodstuffs as ‘essential’ and ‘non-essential’.

Historically, the VAT relief system was established ‘to allow zero-rating for most food and drink which is meant for human consumption, but to tax items of food and drink which might be considered non-essential’. Under this system, biscuits and cakes are considered ‘essential’ but confectionary ‘non-essential’. Ironically this means that  ‘toffee apples are accepted as a zero-rated food’ whether coated in toffee (sugar) or chocolate;

Is it not time to bring  the VAT system up to date so that it reflects our most important health concerns? Rather than introducing a tax that is contradictory – flapjacks are high sugar ‘cakes’ but ‘essential’?? – should we not reform an existing tax which ‘penalises’ ‘non-essential’ products such as protein or energy balls and ‘rewards’ the producers of ‘essential’ cakes and biscuits.

I don’t dispute the fact that my products contain sugars. However, these sugars are contained within the fruit. At Bakes and Balls, we use high quality, organic fruit – dates, figs and prunes (the only fruit to have a designated health claim for digestion and bone health). The sugars are attached to the fibres in the fruit and so are released more slowly than free sugars helping the consumer to feel fuller for longer; avoiding sugar spikes and the resultant dip and need to snack again.

As discussed at the seminar “Dried Fruit and Public Health” held at The King’s Fund earlier this year, whilst high in sugars, dried fruit also brings other health benefits. Prunes contain Vitamin C – which helps the blood to absorb iron intake Dates and figs are a good source of potassium and magnesium. Currently, a third of the UK population are potassium deficient; significant because low potassium levels are linked to high blood pressure. Figs also contain Vitamins A, E and K; figs and prunes are a source of calcium – essential for good bone health; while dates contain Vitamin B6 and are a source of insoluble fibre which aids digestion.

Prunes and figs contain soluble fibre, which helps to normalise blood sugar levels. Soluble fibre slows down the rate at which food leaves the stomach and delays the absorption of glucose. Soluble fibre also increases insulin sensitivity and can prove useful in preventing and treating type 2 diabetes. In addition, soluble fibre helps you to feel sated (that satisfied feeling when you sit back and rub your stomach, feeling full after a meal) by slowing the rate at which food leaves the stomach. Therefore you are less inclined to snack. With an impending obesity and diabetes problem, should be not be encouraging people to consume dried fruit rather than ‘let them eat cake’!

Reform VAT

The VAT issue has been the subject of many court cases, predominantly debating the question of whether or not items should be labelled as ‘confectionary’. In 2014, the ‘Snowballs’ tribunal concluded that the chocolate covered marshmallows produced by two Scottish companies were classified as cakes because of ‘the ingredients, the cooking process and the shelf life’. Meanwhile, according to one ruling, flapjacks are cakes because the syrup forms an integral part of the binding process rather than being used as a sweetener; whilst in another it is because “at the inception of VAT, flapjacks were widely accepted as cakes”.

The VAT system has become overly complex and contradictory as it has struggled to keep up with new products coming to the market place and large businesses have fought and won; fought and lost in tribunals seemingly as a result of questioning definitions of cake, biscuit and confectionary. Rather than debate such intricacies, should the focus not be one of refined sugar? Why is it written into law that biscuits and cakes are ‘essential’ foodstuffs when they are invariably items which dieticians (including those on the panel of the recent Sugar Debate in Parliament) accept should be consumed on occasion rather than as the norm.

What remains unchallenged is the outdated acceptance of cakes and biscuits as ‘essential’ in VAT terms whilst the consumer struggles to make appropriate choices over healthier options. Ultimately, this comes down to price and so when you’re stood at the tills faced with the choices of muffins, cake bars; flapjacks against energy balls or snack bars the latter are automatically 20% more expensive because of the tax system – regardless of the relative costs of the raw ingredients.

Stephen Hall

Founder, Bakes and Balls