h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

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!!

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...

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)