It is our policy that there is a difference between flapjacks and cereal bars. This policy development arose because, at the inception of VAT, flapjacks were widely accepted as cakes, and cereal bars were not widely available, if at all. Flapjacks were accepted as being a cake of common perception and widespread home-baking, not because of any specific reasoning behind such factors as their recipe, ingredients or the manufacturing process.
However, since that time, the difference between flapjacks and cereal bars has narrowed due to the development of cereal bars and their current proliferation on the market. The amendment to the law in 1988 was made to bring products, particularly cereal bars, within the scope of the standard rate by defining confectionery as sweetened items of prepared food normally eaten with the fingers. As a result cereal bars were standard-rated as long as they are sweetened.
The problem that has arisen is that a flapjack is, historically, accepted as a cake, but should probably now be categorized as a cereal bar, and therefore standard-rated, within the legislation.### VAT treatment of flapjacks
We therefore define flapjack narrowly, as it is intended to only apply to that product as it was at the inception of VAT. We allow the zero-rating of standard flapjacks along with minor variations, for example when ingredients like dried fruit, raisins, chocolate chips etc are added. We view the addition of toppings similarly, such as with a layer of chocolate or yoghurt.
We draw the line between flapjacks and cereal bars at any alteration to a flapjack that takes it into the category of being a cereal bar. We interpret this with our policy that a traditional flapjack consists solely of oats. The addition of other cereals to the product turns it into a cereal bar, as it is no longer a traditional flapjack.
It is difficult to draw a borderline between the two products, as flapjacks could easily be viewed as cereal bars. However, the above policy is, we believe, fair and reasonable while being consistent with the law and with the development of the policy since the inception of VAT.
