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Greggs share price soars following 'pasty tax' U-turn

Baked goods outlet Greggs has received significant publicity from the 'pasty tax' saga. Credit: Tim Ireland/PA Wire

Bakery chain Greggs was celebrating today following the Government's U-turn on the unpopular "pasty tax".

Chancellor George Osborne caved in on his plans to charge the 20% rate of VAT on hot baked snacks such as pasties and pies.

The climbdown, which followed a campaign to scrap the tax that was supported by 300,000 signatures, saw Greggs shares rise 8% today.

Greggs chief executive Ken McMeikan said: "This is fantastic news for the customer more than anything.

"If we had to put up prices by 20% in the current marketplace when consumers are having a very difficult time we expected there would be an impact on sales but we don't know what it would have been.

"I think the Government deserves to be applauded."

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Pasty tax: What's hot & what's not

Treasury sources are describing the revision to their pasty tax plans as "nice, easy, simple."

Let's look at what hot foods will be subject to VAT and what will escape the 20% tax after the Government climbdown.

Hot food not subject to VAT:

  • Pasties
  • Sausage rolls
  • Anything sold from shelves and being allowed to cool having being cooked

Hot food that will have VAT imposed:

  • Takeaways
  • Pizza
  • Food kept and sold hot
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