The announcement in yesterday’s budget that food bought at above “ambient room temperature” could in the near future have the full 20% of VAT lobbed onto its price. Seen locally in Cornwall as an attack on our lunch time snack of choice – the pasty – I’m not seeing this an attack on the Cornish by the chancellor. Nope, I’m seeing it as one of the dumbest ways to raise money I have ever heard of.
It’s such a bureaucratic move. Who’s going to be going around to check whether hot or cold pasties are being sold? Let alone kebabs…
Perhaps the best interpretation of this farcical move has appeared on Business Cornwall:
But, from 1 October 2012, any pasty sold above “ambient air temperature” will be subject to VAT at the full rate – the draft rules specifically refer to the need to allow a pasty to cool to ambient air temperature before sale to remain zero rated.
So we may have a baker’s tray of 30 pasties at the back of the shop cooling, having come out of the oven 5 minutes ago. All the pasties on the counter have been sold. The normal price is £2 and the customer has a choice: either wait for 40 minutes for the pasty to have cooled sufficiently and pay £2; or have one now and pay £2.40. And if the harassed serving staff are harried into selling one early, and a VAT inspector is watching, the baker may be in front of a Tax Tribunal!
So, unless a baker refuses to sell a warm pasty until it has cooled (or keeps his shop at Equatorial temperatures) the standard rate will apply to all retail sales of fresh pasties, effectively creaming off 1/6th of the profits or adding 20% to the price to the customer.
But who the hell is going to check on this? If the government tries to go through with this, if it comes into action, it’s going to cost a lot of money to enforce. I might also add that the whole situation is somewhat ironic, considering that MPs have their hot, Commons lunches subsidized.
If you’re as peeved off as me about this whole thing, then I advise you to follow the advice on The Rob Cornish Blog:
Pasty tax revisited
Further to my blog last night on the dreaded pasty tax (VAT will now be applied to takeaway goods sold above ambient temperature). The man in charge of consultation (the poor bugger) is below and details of how to contact him, why not send him an email or write and explain how this will effect the Cornish pasty and take more taxes from Cornwall.
How to respond:
Postal address and email address to which written responses can be submitted.
VAT Projects Team
3C/10, 100 Parliament Street, London, SW1A 2BQ
Additional ways to be involved:
HMRC is also happy to meet with and speak to other interested parties. Contact details are as above.
After the consultation:
A summary of responses will be published and the responses considered before a final version of the legislation is laid before Parliament in the summer.
I also recommend signing up to the Facebook Group Say No to the Pasty Tax.