The name Maurice Lauré won't mean much to many of you. But as the French civil servant who first advocated VAT back in 1954, he could be blamed for championing the most absurd piece of taxation many of us will ever encounter, particularly when it comes to food and drink. Is there any other industry where products as similar as biscuits without a chocolate topping, and biscuits with a chocolate topping, are, for tax purposes, treated as entirely different goods?
Or tortilla chips and potato crisps. Buy one and you get it VAT-free, buy the other and the taxman benefits to the tune of 17.5%. Or how about a milkshake with your McDonald's? That comes VAT-free too, if you take it away, but order a Coke or eat in, and again, the taxman gets a cut.
In fairness, it isn't Lauré's fault. He would be staggered to learn that his simple consumption tax has, in the UK at least, turned into such a complicated issue.
The law has resulted in some bizarre tribunals, as those involved in the now famous 1991 Jaffa Cake case will attest. In an effort to prove that Jaffa Cakes are cakes and not biscuits (because, lest we forget, chocolate-covered biscuits are standard rated at 17.5% while plain biscuits and cakes are zero-rated), McVitie's baked a giant Jaffa Cake to show that its sponge body goes hard when stale, like a cake, while biscuits go soft.
Had McVitie's failed to prove its point, it would have been liable to decades-worth of VAT backpayments. Luckily it did but it hasn't stopped HMRC trying to squeeze all sorts of other manufacturers for extra cash.
Unilever is the latest in a line of suppliers who are battling to have VAT removed from their products. It is in discussions with HM Revenue & Customs about its Vie smoothies and whether they are suitable for zero rating.
Simon Newark, VAT partner at accountancy UHY Hacker Young, says: "HMRC will have a go at anything. My favourite gripe is smoothies. If fruit and vegetables are zero-rated, and cold gazpacho soup in a carton is zero-rated, why is a smoothie subject to VAT?"
The answer is that it is classed as a beverage (despite being made of fruit).
HMRC even once tried to tax our sausage casings. It argued that, as sausage casings were made of collagen, they were not a food and therefore subject to VAT.
Thankfully, the tribunal found differently. In turn, manufacturers often decide to play HMRC at its own game. Alan Connell, VAT director at law firm Eversheds, says: "I know of cases where suppliers have factored the cost of a VAT tribunal into NPD budgets. They don't expect to get away with it, but if they can get a zero rating, it's a bonus."
So how have these peculiar circumstances come about? It all goes back to 1973 when the government first introduced VAT and decreed that essential foods would be VAT-free, so that those on lower incomes would not suffer disproportionate tax charges. That was noble enough. In 1993 the EU Single Market was formed, and although we were allowed to keep our zero ratings, we weren't allowed to add new categories.
So any new foods have to be squeezed into the existing categories, whether they fit or not. Factor in HMRC's unrelenting drive for cash, and we are led to the Jaffa Cake débâcle, and countless others.
Even what appear to be clear-cut cases can cause a certain amount of head scratching. Take, for instance, the case of McCoy's Dips. Crisps on their own are standard-rated. But if they require further preparation before consumption they are zero-rated. Last year, United Biscuits went to tribunal with its McCoy's Dips when sold together with crisps to assert that the act of dipping was further preparation, and they should therefore be zero-rated.
Two years earlier, Procter & Gamble went through exactly the same process with its Pringles Dippers.
It successfully proved that the act of dipping was further preparation and so zero-rating should apply. However, this time round the tribunal found that the act of dipping was not further preparation and McCoy's Dips would be standard-rated.
For anyone who works with VAT day-in-day-out, it all seems a bit ridiculous. "It certainly helps to have a sense of humour when talking about food and VAT," says Newark. "But the question is, who benefits from zero-rating?"
As zero-rated products should, in theory, be cheaper than standard-rated products, the consumer should benefit.
However, the prices of products with different VAT rates, such as tortillas and crisps, rarely reflect that difference, because, if you listen to the retailers, the market dictates their prices, not the taxman, and so any VAT charges they have to pay come out of their profits, not from the consumer. If that's correct, zero-rated products will only result in better margins for the retailer.
In any case, whether a consumer buys tortillas or crisps is seldom price-related at all. It's just a matter of personal taste, so why is the VAT treatment different?
The answers to these questions do not come easily. A spokesman for HMRC says: "The zero-rating rules are fairly clear and do not need to change. However, cases do occur that need to be looked at in detail."
Perhaps the problem is that HMRC is not always sure of its rules itself, as Marks and Spencer has recently discovered. It is involved in a £7.2m claim concerning a line of teacakes it has been selling since 1973.
HMRC had told the supplier to class them as biscuits, VAT-able at the standard rate, when they are in fact cakes and should have been zero-rated. HMRC has agreed to a partial repayment. However, it has already taken ten years to get this far, and in pushing for a full repayment, M&S has now forced the case to the European Court of Justice.
M&S is one of the lucky ones though. Many applications for zero-rating get nowhere. Sports drinks, smoothies and cereal bars are particularly tricky subjects. Connell says: "Some of these decisions are really quite perverse. All the ingredients in a cereal bar by themselves, for instance, would be zero-rated, but put them together and add a bit of sweetening and all of a sudden it's a luxury item."
Even the way you package an item will have VAT consequences. Sweetened dried fruit, if sold as confectionery only, is standard-rated, but label it as suitable for home cooking too and you can sell it VAT-free.
Despite all these bemusing examples, it's unlikely anything will change. "The government would like to tax food with reference to health," says Newark. "But does it have the bottle to take unhealthy foods out of zero rating - the 'fat tax'. Just imagine the headlines - 'Gordon taxes your chicken nuggets'. For some reason, I can't see it happening."
Peter Mason, VAT consultant at law firm CMS Cameron McKenna, thinks that a single reduced rate would work best: "Is it not time to consider a general 5% rate on everything?" he asks.
EU harmonisation is on the cards but is a decade away at least. Until then we are stuck with a system that says it won't tax ice cream wafers, unless they are sold with an ice cream. Or if they're partially covered in chocolate. But if they're basket-shaped you can have them VAT-free, even if covered in chocolate, because that makes them a food and not a confection. You work it out.