Storm in a teacake battle settled

A 13-year battle over a chocolate teacake was finally settled in the highest court in the land today.

Marks & Spencer took action against the taxman, who charged VAT on its popular chocolate-covered teacakes between 1973 and 1994, successfully claiming they should have been zero-rated as biscuits.

In 1995, the high-street chain claimed a repayment of £3.5m (€3.93m) from the Customs and Excise Commissioners who refused to refund 90%, saying the tax had been passed on to customers so M&S would be unjustly enriched by repayment in full.

Today three Law Lords affirmed last year’s decision by the European Court of Justice that M&S was entitled to a full refund.

Lord Walker said the European court’s ruling left open certain matters for the UK courts but the commissioners had decided not to pursue them.