VAT dispute – is a poppadom really a crisp?

Another day, another VAT dispute. In recent years we’ve seen plenty of cases where manufacturers have clashed with HMRC over the VAT rating of their products. Famously, there was the dispute over whether a Jaffa Cake was a cake or a biscuit for VAT purposes. Then there was the tussle over whether giant marshmallows were confectionary or merely an ingredient. Now a tribunal has delivered a ruling on whether Walkers’ Sensations Poppadoms are in fact poppadoms or crisps.

Poppadoms or crisps?

The question over whether Walkers’ product should be classified as poppadoms or crisps is important. The reason? If they are poppadoms, no VAT is charged on their sale. If they are crisps, 20% VAT is payable.

This VAT dispute was first ruled on by a tax tribunal in early 2024. This found that the snack, which has a 40% potato content, had more than enough potato in them to qualify as crisps. The fact they were called poppadoms was irrelevant. As the tribunal judges rather drily put it: “Nominative determinism is not a characteristic of snack foods: calling a snack food Hula Hoops does not mean that one could twirl that product around one’s midriff, nor is Monster Munch generally reserved as a food for monsters.”

Walkers were clearly unamused. As a result, it appealed against the ruling. This appeal was ruled on in May 2025.

VAT dispute grounds for appeal

Walkers brought the VAT dispute back by bringing various grounds for appeal before the tribunal. These can be summarised as follows.

1. Sensations Poppadoms are partly made from potato granules, unlike crisps which are largely made from potato, potato flour or potato starch.
2. The Walkers product only containts 17 to 18 percent of potato starch, therefore it cannot be classed as a crisp.
3. The products are called Poppadoms, not crisps.
4. The Poppadoms come in different flavours to crisps, such as Lime & Coriander Chutney and Mango & Red Chilli Chutney.
5. The products contain gram flour (chickpea flour) like conventional poppadoms.
6. Poppadoms are conceptually distinct from crisps. Most consumers would buy other poppadoms if Walkers’ product was unavailable, not crisps.

The tribunal rejected each ground for appeal in the VAT dispute. The fundamental point that it made was that, “the question is not whether the products are similar to poppadoms, it is whether they are similar to potato crisps. The products may be similar to poppadoms, but that does not prevent them from being similar to potato crisps.”

In short, it upheld the ruling of the First Tier Tribunal. For VAT purposes at least, Walkers’ Sensations Poppadoms are crisps, not poppadoms.

How to avoid a VAT dispute

The Walkers VAT dispute is yet another reminder that it’s essential to charge the correct VAT rate on your products. Walkers may have deep enough pockets to take a VAT dispute to tribunal. A smaller, independent manufacturer probably doesn’t. Being faced with a backdated VAT bill for incorrectly failing to charge VAT could ruin some businesses.

That’s why it’s a good idea for businesses to use our VAT returns service. In addition to making sure your returns are correctly submitted on time, we’ll also advise you on what VAT rating your products have and check with HMRC where there is any doubt. If you’d like to learn more about how our VAT experts can help you, get in touch today.