'Pasty Tax' gets go-ahead despite opposition in Parliament

By Peter Ruddick

- Last updated on GMT

Related tags: Cornwall

'Pasty Tax': The closure of a VAT loophole that had allowed some operators selling Cornish pasties and sausage rolls without VAT will go ahead despite significant opposition in Parliament
'Pasty Tax': The closure of a VAT loophole that had allowed some operators selling Cornish pasties and sausage rolls without VAT will go ahead despite significant opposition in Parliament
The so-called 'Pasty Tax' will be introduced as planned after a last-minute amendment to the Budget proposals for VAT changes on hot takeaway food was narrowly defeated by 35 votes in the House of Commons last night.

The Government proposal, first revealed in the Budget last month​, was designed to cut a VAT loophole that allowed some operators not to pay the tax if they could prove their product was not designed to necessarily be eaten immediately or, therefore, hot. At the time some fast-casual restaurant operators had welcomed the closure of the loophole​.

Stephen Gilbert, the representative for the Cornwall seat of St Austell & Newquay, led a proposed MP amendment to reverse the policy and earlier in the day had asked the Primeminister David Cameron why Cornish pasties were to be charged VAT when caviar remained exempt. Some MPs have pledged to carry on the fight against the tax which businesses such as Gregg's had campaigned against and some bakers are planning to march on Downing Street next week to protest. 

Commenting on the development Guy Fielding, business development director for foodservice Europe at foodservice research agency NPD, said the recession had led to growth in the Cornish pasty and sausage roll market but "the proposed VAT introduction definitely has the potential to damage that growth. The extent of that impact is something we'll be able to gauge only in the next six months."

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