Law Weblog

Treasury refunds £3.5m to Marks & Spencer; a teacake is a biscuit not at a cake

On 11 April 2008, the European Court of Justice finally agreed that a teacake is a biscuit and confirmed that the Treasury should pay back £3.5million in overpaid VAT to Marks and Spencer.

Marks & Spencer plc v Commissioners of Customs and Excise [2008 ECJ
[Community Law – the system of VAT is within the scope of Community law – court structure – article 234 references]
Tax officials mistakenly classified M&S teacakes as chocolate biscuits. Chocolate biscuits are subject to standard rate VAT, whereas chocolate cakes incur none.

Customs & Excise (now HM Revenue & Customs) acknowledged they had made a mistake. The ECJ also ruled that Jaffa cakes were cakes, and not biscuits. Legal action lasted 12 years.

At first, Customs and Excise offered £350,000; they said that most of the VAT had been passed on to M&S customers. They argued that if they paid back the total sum M&S would be “unjustly enriched”. They also argued that there was a three-year limit on claims for repayment; they gave back just £88,440.

Held: In its judgment, the ECJ said that the “unjust enrichment” rule did not apply on the facts. The epic dispute lasted 12 years and involved two trips to the European Court of Justice.

VAT was introduced in the UK in 1973. Under the rules, “chocolate-covered products” were all classed as biscuits and not as cakes – even chocolate teacakes – before officials recognised their error.

[Comment]
What students have said during the last 12 years …

• A teacake is a sweet, bun containing currants or sultanas, not chocolate covered or otherwise.
• Custard cream as the UK favourite biscuit.
• M&S teacakes are so dangerous and addictive that they should be treated not as cakes or biscuits but as a Class A drug (and so zero-rated for VAT).
• A biscuit, if left on a plate goes soft, if a cake is left on a plate it goes hard.

Police Powers: number of black suspects stopped increases

dica2

Race and the criminal justice system

Common sense has prevailed – the judge the apple core and the council

According to Judge Nicholas Webb at Wolverhampton Crown Court, common sense has prevailed when lawyers for Wolverhampton City Council, offered no evidence against Kate Badger, 26, who was accused of dropping an apple core.

The case has already cost taxpayers thousands of pounds and a trial before a jury would have cost up to £5,000 a day.

Miss Badger was not the person who threw “controlled waste” from her Volkswagen Golf parked in a Wolverhampton street on 19 March 2007. But, council chiefs wanted Miss Badger to pay a £60 penalty notice for the offence but she refused and elected go to court. Only at court did she identify who was responsible. The authority is now pursuing the culprit.

Prosecuting lawyers could sit in judgement

The Times reports on calls to end the ban on Crown Prosecution Service lawyers becoming judges. Supporters say the move would increase diversity amongst the judiciary.

R (on the application of Gentle and another) v The Prime Minister [2008] HL

The House of Lords unanimously rejected an attempt to use the European Convention on Human Rights to force the government into holding a public inquiry into the circumstances surrounding the invasion if Iraq. The action was brought by the mothers of two young soldiers who died in Iraq.

A rarely convened court of nine law lords found that Article 2 of the ECHR, which protects the right to life, could not be applied to question the legality of a nation’s decision to resort to war.

Lord Bingham said that the lawfulness of military action had no immediate bearing on the risk of fatalities. He cited the example of Pearl Harbour, where a flagrantly unlawful surprise attack on the American fleet minimised the risk to the aggressor.

He further said that the High Court and the Court of Appeal had dismissed the claim, despite the sympathy they felt for the appellants, and that he had reached the same conclusion.

Lord Hope said that had there been an issue which was capable of being reviewed by the courts, they would have done so.

Baroness Hale said that if the use of force was lawful, it would be of some comfort to the mothers to know that their sons had died in a just cause.

Baroness Hale went on to say that she wished that Article 2 did impose a duty on a state not to send its soldiers to fight in an unlawful war.

The Corporate Manslaughter and Corporate Homicide Act comes into force today – 6 April 2008

The Act will make it easier to prosecute firms for deaths in the workplace.The Act sets out a new offence where a “gross failure” results in a person’s death.

Courts are able to look at management systems and practices across the organisation rather than simply the actions of individuals. Firms will increasingly be called upon to demonstrate that they have good safety procedures in place, particularly those companies involved with a supply chain business using contractors or suppliers.

One aspect of the act that is less helpful is the ability of courts to impose an order requiring the organisation to publicise details of its conviction and fine.

The Corporate Manslaughter Act is not just about complying with the law, it’s about making sure that businesses have the right ‘attitude’. If a company has a good, strong management system then the new act will not give rise to fundamental changes in a company’s procedures. It is more a case for those businesses that are not as robust who need to be aware of the act.

The main benefit of the Act may be to raise the profile of good health and safety.
Employers that are already meeting their existing obligations under the Health and Safety at Work Act 1974 have nothing to fear, as this new act does not bring with it any further requirements.

If an employer is found guilty of corporate manslaughter there is increased damage to the organisational reputation. We have seen some cases such as major rail disasters resulting in punitive fines from the Health and Safety Executive and subsequent damaging headlines. That kind of negative publicity will increase significantly by this legislation.

There were 0.8 fatal workplace injuries for every 100,000 workers in 2006-07.