Government in climb-down on ‘pasty tax'

29 May 2012 by
Government in climb-down on ‘pasty tax'

The Government has performed a U-turn on its plans to introduce VAT on hot take-away food - dubbed the pasty tax.

Chancellor George Osborne announced plans in his March Budget to close a VAT loophole, and had proposed that any food served above ambient temperature would be taxed at the standard rate of 20%, rather than being zero-rated.

But following a popular backlash and criticism from companies including baker Greggs, the chancellor announced yesterday that pasties and other bakery items would not attract VAT if they were "cooling down" after being removed from the oven.

Shares in Greggs have risen on the news, up 9% this morning in trading earlier, having fallen 15% since the Budget.

Cornish pasty boss objects to new hot food legislation >>

NPD warns that ‘pastygate' tax may dent growing sales of hot sausage rolls >>

Cameron defends ‘pasty tax' >>

By Neil Gerrard

E-mail your comments to Neil Gerrard here.

If you have something to say on this story or anything else join the debate at Table Talk - Caterer's new networking forum. Go to jobs

Looking for a new job? Find your next job here with jobs

Blogs on ]( Catch up with more news and gossip on all Caterer's blogs
[E-Newsletters]([ For the latest hospitality news, sign up for our E-newsletters
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking