Jaffa cakes are indeed cakes and were, on balance decided to be so in the famous case with the taxman:
Customs and Excise [now HMRC] had accepted since the start of VAT that Jaffa cakes were zero-rated as cakes, but always had misgivings about whether this was correct. [Customs and Revenue decide they're actually biscuits, Mcvities successfully appeal at Tribunal] The Tribunal listed the factors it considered in coming to a decision as follows.
The product’s name was a minor consideration.
Ingredients: Cake can be made of widely differing ingredients, but Jaffa cakes were made of an egg, flour, and sugar mixture which was aerated on cooking and was the same as a traditional sponge cake. It was a thin batter rather than the thicker dough expected for a biscuit texture.
Cake would be expected to be soft and friable; biscuit would be expected to be crisp and able to be snapped. Jaffa cakes had the texture of sponge cake.
Size: Jaffa cakes were in size more like biscuits than cakes.
Packaging: Jaffa cakes were sold in packages more similar to biscuits than cakes.
Marketing: Jaffa cakes were generally displayed for sale with biscuits rather than cakes.
On going stale, a Jaffa cake goes hard like a cake rather than soft like a biscuit.
Jaffa cakes are presented as a snack, eaten with the fingers, whereas a cake may be more often expected to be eaten with a fork. They also appeal to children, who could eat one in a few mouthfuls rather like a sweet.
The sponge part of a Jaffa cake is a substantial part of the product in terms of bulk and texture when eaten. Taking all these factors into account, Jaffa cakes had characteristics of both cakes and biscuits, but the tribunal thought they had enough characteristics of cakes to be accepted as such, and they were therefore zero-rated
Who says tax isn't exciting