The Samosa / Pasty Tax

A Cornish pasty made by Warrens cut in half. The filling is beef steak, potato, turnip and onion. (Photo credit: Wikipedia)

Almost as soon as we referred to the Samosa Tax, it was nicknamed the Pasty Tax – so this is what we shall call it.  The Pasty Tax was one of the ‘new’ taxes announced at Budget 2012, which we reported on at the time.  Therefore, it makes sense to keep you updated on the latest developments.

Whilst VAT has been charged on takeaway food for many years, like fish and chips, other hot takeaway products were exempt.  These were the ones most commonly provided by supermarkets and bakeries, such as rotisserie chickens and Cornish Pasties.  The Chancellor announced that VAT would apply to these hot products from October 2012.  This led to an understandable outcry, from the bakery industry in particular, and a consultation on the issue – note, however, that freshly made bread was never within the scope of the new tax.

David Cameron and George Osborne were forced to come out publically and claim that they liked Cornish pasties, whilst Nick Clegg (on a visit toCornwall) said that Government was ‘listening very carefully’.   As the consultation closed last week, it was reported that, during the Commons recess, it will be announced that the definition of ‘hot’ will be changed, thereby exempting many items.  It is understood that items that are taken out of the oven and left to cool will be exempt – pasties and sausage rolls, for example.  However, items remaining in the oven and sold from the oven, or wrapped in heat-retention packaging, will be subject to VAT – rotisserie chickens, for example.

Comment

I also note that the ‘Caravan Tax’ – a new VAT charge at 20% on static caravans – is likely to be reduced to 5%.  Perhaps these changes of direction by the Government are a sign that it is listening to popular opinion.  Or, are the policy changes an occupational reality of a Government working in coalition?

Neither of them directly affects our professional lives, therefore, reporting on the Pasty Tax closes with this article!

Further Information

• Payroll Help 27 March 2012 –The Samosa Tax