Financial News
- 30 May 2012, 3:32
Government Does U-Turn On Pasty Tax
The Government is to announce U-turns on its controversial pasty tax and caravan tax revealed in the Budget.
Critics slammed plans to levy VAT at 20% on all hot food, saying the move hit lunchtime snacks such as pasties.
But under the new proposals, it is thought that VAT will only be charged on food intended to be served hot - not food that is cooked and then left to cool.
Proposals to charge full VAT on static caravans are also expected to be watered down - being levied at just 5%.
The rethink follows a consultation period which ended on May 18.
A Treasury source said: "We rightly consulted, listened and are glad we have a solution that is fair."
A Treasury spokesman said: "The Budget announced a consultation on a change to VAT on hot takeaway food, designed to remove inconsistency and ambiguity in the system and level the playing field across the takeaway food market.
"After extensive engagement we have improved the policy, addressing practical concerns, ensuring that the new regime could be as simple as possible to apply.
"We have addressed these in a way that allows us to remove the inconsistent VAT treatment, while not imposing any additional requirement on businesses to test the temperature of their products."
The VAT proposals remain complicated, though.
Under the new plans, tax will be charged on food that is provided hot or cooked to order.
It will also apply to items that are kept warm in hot cabinets or served in heat-retaining packaging - for example, a takeaway in foil-lined packaging.
Snacks which are advertised as hot will also be subject to the tax.
Cornish MP George Eustice praised the Government's rethink.
"This is great news for the Cornish pasty industry and resolves all of the problems that had been raised by the industry." he said.
"The Treasury should be given credit for the way they have approached the issue."
After the initial proposals were announced in the Budget, hundreds of bakers marched on Downing Street in protest.
On static caravans, the Treasury said the 5% rate acknowledged the unclear boundaries between residential and non-residential caravans
Conservative MP Graham Stuart, who organised a petition of Parliament signed by more than 25 MPs, said he was happy with the compromise given the state of the economy.
"It is great news for the manufacturing industry and also for the park and coastal communities all around the country," he said.
what do you think?
EQINOX187 .
"plans to levy VAT at 20% on all hot food" What the heck is this joke of a goverment smoking
Name witheld
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gordon
Does this mean the new tax on caravan ground rent has been reduced as well?
John Poole
They are supposed to consult before they introduce tax changes not after - what a bunch of wasters. They clearly made two dreadful errors - time for Cameron, Osborne and Clegg to go.
Charles Wood
There go our fish n chips, and our curries? well done (I dont think)
d and d Phillips
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stevemyrsole
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david nicholls
Another tax .We are the most tax country on earth .And what do we get NOTHING .That all the resturant out of business now .Hope the govenment is happy . Dave
Adrian Wagstaff
I think it won't be long before the government start to put a tax on tax itself. They'll start off by saying, "Tax on parked caravans of 5% plus taxing the tax itself adds an extra 10%." It won't be too long before they start taxing lawns for needing water during the summer. That will classified as parked grass. All lawns will probably require a 5% parked caravan tax plus an extra 10% taxing of the tax itself.
howard
Nice one Adrian, reminds me of the old Beatle's (George Harrison) song --Taxman. Many a true word is spoken in jest.
Bernard Petrie
Its amazing how easy the government finds it is to put a tax on every day things, but struggles with the likes of capping rents or taxing companies for not investing before taking profits. Some of the biggest companies with the government colluding want people to pay for things like high speed broadband before they have even built the system. Must ask Tata if they would like people to buy their cars before they make them. If it is necessary for the country to have the likes of high speed broad band, let the government pay then recoup the expense once its working without taking a profit..
Terri Dalton
So the decision to charge 20% VAT on hot food has been overturned how? Answer, it hasn't! You can buy a cold cooked pasty, but not a hot one. They really do think we're stupid don't they? The shame of it is, they'll get away with it again!
Brian Holmes
Taxing any food at all is despicable and cannot be justified under any circumstances. But we have been groomed for years to accept crippling taxation on absolutely everything and have now reached the point where Government takes it as their unquestionable right to take the food out of our mouths. We are being taxed into poverty, we can barely afford to heat our homes or drive our cars because of tax and our standard of living is being destroyed by tax. This has got to stop.
Franklin Taitt
What's the difference
Steve
If they had stupidity tax,the government would all be skint along with their hangars on.
Charles Rickards
So how do we want to pay the taxes required to fund the services we want the government to provide? How should we pay for the NHS, Teachers, the Police and fire service and on and on. Should these services only be paid for by chosen sectors of society or should everyone who benefits make a contribution? Being devils advocate, if a pasty is sold while it is cooling it should be VAT free, however, if it is kept hot or heated for sale should it be subject to VAT? I am surprised that we eat so many pasties for it to be such a money spinner! Maybe some clever civil servant has done the sums and worked out it's not worth it.
Gavin Nellis
Wow the poor people can buy their kids some pasties instead of cooking healthy food for them now,and all for under a £1
EQINOX187 .
What next an extra tax on toilet paper? oh why stop there lets put an extra tax on soap oh and lets tax the air people breath. If there goverment stoped sending billions aid that we cant afford to other countrys and stoped spending billions on loss makeing ventures (olimpics cough). They wouldent need to find stupid ways to tax more from the already over taxed public. The realy dont have a clue what there doing realy and that is sadly clear for all to see the three stooges come to mind
Mazda Thomo
Isnt it just so typical of CONDEMs to tax the services most used by the working class - the ones that can least afford it!!!
David Wragg
It really is pathetic and even frightening to see how the government is continually seeking to find resh things to tax. They will soon charge us for paying our taxes, which is what some businesses do, not just ticket-booking agencies, but even one credit card company. There are some serious problems. We must, by law, insure our cars, but that is taxed. If you demolish a house and build a new one, VAT is not payable, but if you convert or renovate an older property - surely a very worthwhile thing to do - you pay the full whack. One now finds some demented fools who regard something that is not taxed as being subsidised!
Stephanie Thraves
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Dave Harris
8:01pm on 28/5/2012
this isn't what we (overweight) working class meant when we asked for the FAT CATS to be taxed more!!