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Cameron defends ‘pasty tax'

28 March 2012 by
Cameron defends ‘pasty tax'

Prime Minister David Cameron has defended the decision to put VAT on all sales of all pasties, a move announced in last week's Budget.

His comments came as opposition to the proposed changes in tax regulations grew.

At a press conference for the London Olympics, Cameron said that since VAT on takeaway food was introduced there had been "a number of businesses trying to find ways around that rule and fighting court cases", according to the BBC.

He said small businesses had paid the tax on their takeaway food for 20 years, but big supermarkets did not.

VAT is not charged on most food and drink - which is described as zero-rated - but it is payable on takeaway food sold to be eaten hot.

However, some retailers and bakeries have argued that their food is sold hot to improve its appearance, or to comply with health and safety regulations - not for consumption that way - and therefore should not attract VAT. The changes proposed in the Budget were designed to scupper that argument.

Cameron said: "I don't think it's fair, for instance, that the small businessman running the fried chicken takeaway is having to charge his customers VAT, but the big supermarket is not having to pay VAT for their fresh hot chickens."

"I am a pasty eater myself, I go to Cornwall on holiday, I love a hot pasty.

"I think the last one I bought was from the West Cornwall Pasty Company. I seem to remember I was in Leeds station at the time and the choice was whether to have one of their small ones or large ones, and I have a feeling I opted for the large one and very good it was too."

Greggs has led criticism of what it has dubbed the "pasty tax", and its chief executive Ken McMeikan told the BBC's Newsnight on Tuesday that it would seriously damage the industry and cause job losses.

"I think to a degree they have lost touch with the issue here - that for ordinary, hard-working families putting 20% on to a product that is freshly baked actually is going to make a severe dent in their pockets when they can ill afford it," he said. "It just shows how out of touch this Government is."

By Neil Gerrard

E-mail your comments to Neil Gerrard here.

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