UK Government reverses decision on ‘pasty tax’

Posted by AFN Staff Writers on 30th May 2012

 

The UK Government has reversed its decision to impose a so-called ‘pasty tax’ – a tax on hot savoury snacks such as pasties, pies and sausage rolls.

The Chancellor of the Exchequer, Conservative MP George Osborne confirmed the change in policy in a letter to the Chairman on the Treasury Select Committee on Monday 28th May.

The ‘pasty tax’, put out for consultation alongside the UK Government Budget in March 2012, would have affected any business selling “food which, or any part of which, is above the ambient air temperature at the time it is provided to the customer, other than freshly baked bread”.

The intention was to end what HM Revenue and Customs defined as a “VAT anomaly” that allows some premises selling certain hot food products for takeaway purposes to not charge VAT.

Responses to the UK Government’s consultation were roundly critical of the new proposal, highlighting in particular the potential confusion that the new rule may cause.

A number of campaigns were begun in order to try and prevent the introduction of the new tax. These ranged from The Sun newspaper’s “Who VAT all the pies” campaign to an on-line petition set up by the Cornish Pasty Society entitled “Don’t Tax My Pasty”.

Commenting on the UK Government’s U-turn decision on the ‘pasty tax’, the UK Association of Convenience Stores’ Chief Executive, James Lowman said, “Unfortunately we did not believe the measure proposed would have delivered the clarity desired; nor could we support a measure that would have led to an overall increase in the cost of food to consumers.”