Government U-Turns on Pasty Tax
The Treasury said on Monday that the British government is making a u-turn on its plans to impose a tax on Cornish pasties and other hot goodies after it was accused by critics of targeting working families. A pasty is a traditional delicacy said to have been invented by miners in Cornwall. They typically consist of meat and vegetables in a pastry crust.
The government has been in the middle of a dispute since it announced the plans to fix a loophole that allows bakeries in the UK to serve hot takeaway food without incurring 20% VAT. These items include sausage rolls, pies and pasties. However, now the government has amended the definition of what makes a hot pasty, which allows it to perform a u-turn on its plans.
VAT isn’t currently charged on most food and drink, nor hot baked goods. However, it’s payable on takeaway food sold and intended to be eaten hot. Hot savouries are exempt, and the u-turn will maintain this. Under the new plans, food that is cooling down instead of being kept warm in a heated display cabinet won’t be charged the VAT.
During the row, Prime Minister David Cameron has had to fend off suggestions that the tax accentuates his lack of a common touch. Chancellor George Osborne was challenged during a Treasury committee to reveal the last time he ate a pasty, and then the same question was asked to the prime minister. Cameron said that it’s unfair takeaway restaurants - like fish and chip shops - have to charge VAT on hot food, when supermarkets and bakeries don’t. He eats pasties himself, and loves them on holiday in Cornwall, he added. Then it was revealed that the shop he claimed to have purchased a pasty from had been shut down for five years.