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:
- Sausage rolls
- Anything sold from shelves and being allowed to cool having being cooked
Hot food that will have VAT imposed:
- Food kept and sold hot
Justice Secretary Kenneth Clarke has defended the Government's tax U-turns, saying the changes came as a result of listening to taxpayers.
The Government has scrapped plans to implement 20% VAT on pasties and reduced the planned tax on static caravans to 5%
The Government continues to feel the heat over its decision to add VAT to hot takeaway baked goods, a move nicknamed "the pasty tax."