Making A Meal Of Pasty Tax

Making A Meal Of Pasty Tax.

Labour shadow chief secretary to the Treasury, Rachel Reeves has described the goverment U-turns on planned VAT rises to cornish pasties and static caravans as "a total and utter shambles".

The U-turns from George Osborne's Budget follow protests by bakers and caravanning enthusiasts.  The government has now altered the definition of what is a "hot" pasty to allow the reversal of its plans.

VAT is not currently charged on most food and drink, or hot baked goods, but is payable on takeaway food sold to be eaten hot.  After the amendment, food such as sausage rolls or pasties sold on shelves - that is, cooling down, rather than being kept hot in a special cabinet - will not be liable for VAT.  

The definition of a "hot" pasty is being altered to allow the reversal, while a 20% charge due to be levied on static caravans will now drop to 5%.