Your commercial news round-up: M&S strawberry sandwich, house prices, Shoosmiths’ serious injury practice, TSB acquisition

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Sandwiches are currently the talk of the country amid tax debates over the new viral M&S product, while house prices experience their most significant drop in two years. Meanwhile, major law firm Shoosmiths transfers serious injury practice and TSB has been bought by Santander.

• In food news, the latest summer phenomena that’s found its way under scrutiny is the limited-edition M&S strawberry sandwich, which has sparked conversations around whether the item should be subject to VAT. The sandwich, which takes inspiration from the Japanese fruit and milk bread sandwich, consists of fresh strawberries and cream between two slices of sweetened bread. Although M&S hasn’t confirmed whether it’s charging 20% VAT on the viral sandwich, Simon Knivett, VAT manager at HW Fisher, has suggested that the “case for classifying” such a sandwich as confectionary “is surprisingly strong”. Max Schofield, a barrister at Devereux Chambers, referenced a similar ongoing case that’s looking at whether ‘mega marshmallows’ should be taxed as confectionary. He said: “If giant marshmallows, because they’re eaten with fingers and are sweet, fall under confectionery rules, so could sweet sandwiches.” This current debate among VAT professionals also reflects the Jaffa Cakes court ruling in 1991, which found that a Jaffa Cake is a cake, not a biscuit, and therefore didn’t qualify to be taxed. Adam Craggs, a partner at leading law firm RPC, added that “the M&S strawberry sandwiches may soon be included in the curious canons of VAT caselaw”. 

• House prices experienced a significant 0.8% drop in June, the largest decline recorded since February 2023, according to UK-based bank Nationwide. This means that the average house value has declined to £271,619 as the market cools, following the end of temporary stamp duty cuts and a change to the thresholds in April. Prior to April 2025, first-time buyers faced no stamp duty charge on their property unless it was above £425,000; however, changes to stamp duty will now see first-time buyers paying the tax on properties costing more than £300,000. Rosie Hooper, chartered financial planner at Quilter Cheviot, said the housing market and the stamp duty reforms “will soon become the norm, and their immediate impact will fade into the rear-view mirror. First-time buyers and movers alike are already beginning to adjust to the new thresholds, which should help stabilise activity over the coming months".

• Leading UK law firm Shoosmiths has transferred its serious injury practice to Fletchers Group, as it plans to sharpen its “strategic focus on the areas aligned to [its] 2030 strategy through further investment in lateral talent”. As part of the deal, 80 Shoosmiths employees will transfer to Fletchers under TUPE arrangements. Phil Barnes, national head of Shoosmiths serious injury team, said that the “decision wasn’t taken lightly” and explained that “it reflects a shared recognition that the serious injury sector is evolving fast, and to keep delivering the very best outcomes for our clients, we need scale, focus and sustained investment”. David Jackson, chief executive at Shoosmiths, said: “The deal also allows us to continue to sharpen our strategic focus on the areas aligned to our 2030 strategy through further investment in lateral talent in the coming months, supporting our ambition to lead the upper mid-market by excelling in our chosen markets across corporate, real estate, and litigation, with a deep sector focus in technology, financial services, energy, infrastructure, and mobility.” 

• High-street bank TSB has been acquired by Santander UK, in a landmark £2.9 billion deal that’ll add five million TSB customers, along with £34 billion in mortgages and £35 billion in deposits to Santander’s portfolio. According to Ana Botin, Banco Santander’s executive chair, the strategy “strengthens our franchise in a core market through the acquisition of a low-risk and complementary business that adds to our diversification”. Moreover, according to RBC estimates, the deal, which is expected to close in Q1 2026, will move Santander’s position from the fifth largest UK mortgage lender to the fourth. Experts indicate that this takeover will be a timely and beneficial boost amid concerns over foreign investments in Britain.  

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