Pasty tax

  • David Cameron argues for a pasty tax – Hansard, 18 Apr 2012
  • The u-turn on the pasty tax - The Sun, 29 May 2012

Arguably the most iconic u-turn from 2012 was the ‘pasty tax’. Before the Budget, food that was fully prepared by an outlet - which happened to be hot out of the oven but could be eaten cold - did not face a charge of VAT. The budget closed this ‘loophole’ by changing the rules so that any hot ready-to-eat food prepared by an outlet would face the full VAT charge.

David Cameron argued for the pasty tax on the ground of fairness when asked about the levy in Parliament in April:

Stephen Gilbert (St Austell and Newquay) (LD): “The prime minister will be aware that no VAT is chargeable on caviar, yet the government propose to charge VAT on the Cornish pasty. Can he tell me why that is fair?”

The prime minister: “I understand that feelings in Cornwall run high on this matter, but let me explain that what I think is unfair is that the same products that are subject to VAT when sold in a fish and chip shop can be sold in supermarkets without being subject to VAT. I do not think that that is fair and that is why it is right for us to redraw the boundaries.”

However, the government has u-turned on this. As The Sun reports:

In a dramatic U-turn, the chancellor caved in on his Budget plan to impose VAT on hot baked snacks like pasties, pies and sausage rolls.

His climbdown is a spectacular victory for The Sun’s “Who VAT all the pies?” campaign.

Mr Osborne admitted he was swayed by The Sun as he dropped his half-baked plans.

We led two months of protest after the Chancellor announced in his Budget that VAT would be slapped on all hot baked snacks.

And as he revealed his U-turn, he said: “I’ve listened to Sun readers and others and I’m glad we’ve got a solution that’s fair.”

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