Are children’s pensions as good as they seem?

If you are heading abroad over the summer, chances are you will be traveling to an E.U. country. 63% of us hope to travel to Europe in the next 12 months, making it by far the most popular destination for British holidaymakers.

However, in the run up to ‘Brexit day’ next March, the affordability of holidaying in Europe remains uncertain… Those of us who’ve visited the continent since the referendum will have already noticed that they are getting a lot less bang for their buck than previously.

As of yet we have very little information on how Brexit will look. With a ‘no-deal’ Brexit looking increasingly likely, it is possible that the pound will remain turbulent until it becomes clear how Brexit is going to pan out.

Ultimately, it is this which will determine whether or not the pound remains weak against the Euro – something that will have a large effect on how our future holidays feel.

In light of all this dreary information, looking outside of the eurozone for your future holidays may be your best bet for your wallet.

This is because the pound has not fallen equally against all currencies. In fact, it has actually gained against some. These countries are generally long haul destinations, although there are a few closer to home.

For instance, since Brexit, the notoriously flakey Argentine peso has fallen 72% against the pound. So, if you want a really good value holiday, your best bet is a 14 hour flight to Buenos Aires.

For those of you who prefer culture and history to warm seas and white sand, Russia should be on your agenda. E.U. and American sanctions have hit the Russian economy hard since part of their Army “accidentally” invaded Ukraine in 2014.

This has meant Sterling has gained 13% on the Ruble, excellent for those of you who don’t mind swapping St Petersburg for Santorini.

Closer to home – but equally lacking in quality sunbathing – Iceland is significantly cheaper than it was a year ago: The Icelandic krona has fallen by 11% on the pound.

Traditionally pricey Switzerland is also cheaper than usual. The Swiss franc is 7% weaker than it was a year ago. If skiing is your thing, the sliding franc makes Switzerland a viable option.

Unfortunately, landlocked Switzerland and freezing Russia and Iceland have very little to offer those of you who want a beach holiday.

Luckily, the pound has risen by 10% on the Indian rupee, so the sandy beaches of Goa and Kerala are an affordable option. What’s more, the Brazilian real is 18% weaker than it was last year. So, for those of you hankering for warmer climes, these may be your best bet.

Legal cases are always most fascinating when they make apparent the law’s many intricacies and ambiguities. VAT tax disputes may not always seem like the most interesting subject. However, a recent tribunal ruling showed how captivating they can be…

Kinnerton Confectionery is a company that primarily sells sweets marketed at children – if you’ve ever seen Peppa Pig Sweets, Kinnerton are the company behind them. Most of these – as confectionary products – are standard VAT rated at 20%.

However, the company recently moved out of their normal market and into the allergen-free market, creating a nut, gluten, egg and dairy-free ‘Just Luxury Dark Chocolate’ bar. This got complicated when they sold their new product with a zero VAT rating.

For those of you unfamiliar with the intricacies of VAT confectionary law (most of you, we expect!), here is a brief summary of the U.K law relevant to this case:

• Most food for human consumption is zero rated
• However, confectionary should be standard rated – this includes chocolate bars
• Cakes and ingredients for making cakes are zero rated

This means that cooking chocolate, when marketed as such, should be zero rated because it counts as a cake ingredient.

To avoid full tax liability, Kinnerton branded the chocolate as suitable for cooking. They wrote on the packaging it was ‘ideal for cakes and desserts’, wording that largely mirrors that used by other cooking chocolate manufacturers. Because of this, Kinnerton thought they had a strong argument for zero rating the chocolate bar.

Products placed in the confectionary section tend to receive greater attention than those placed in the baking aisle, but are usually standard VAT rated. By creating a confectionary product that was zero rated, Kinnerton Confectionery tried to have their cake and eat it.

HMRC, however, were quick to catch on. They argued that because the product was often sold alongside confectionary items, it wasn’t marketed or sold as a cooking ingredient. Basically their argument rested on the premise that, although Kinnerton stated that it was suitable for cooking, this didn’t equate to the product being a cooking chocolate.

HMRC decided to appeal against the chocolate bar’s tax status, and their assessment was upheld by a judge. Kinnerton was ordered to pay HMRC a £258,470 liability and had to standard rate their product.

The rather vague distinction between confectionary products and standard foods has resulted in a few strange VAT anomalies. Strawberry flavoured powdered milkshakes, for instance, incur standard VAT; chocolate flavour, however, is VAT free. An even more bizarre example is that gingerbread men with just two chocolate eyes are zero rated; add chocolate trousers and they become liable to full VAT.