Pasty Tax U-turn

Kathy Wardle reports on the pasty industry's reaction to a Government turnaround on putting VAT on hot pasties.

Ann Muller of Ann's Pasties on the Lizard will not have to pay the VAT. She says, "My pasties are freshly baked, I don't keep anything in a hot cabinet. So the pasties are either hot or warm or cold. It was going to be really difficult to put this tax on without it seeming ridiculous".

Treasury Minister David Gauke MP speaks about the Governments decision to amend the proposed 'Pasty Tax'

Stephen Gilbert, the Liberal Democrat MP for St Austell and Newquay is overjoyed by the Government turnaround on the so-called Pasty Tax

The Government has announced a U-turn on the controversial proposal nicknamed the pasty tax. Plans to levy VAT at 20% on all hot food brought huge protests from Devon and Cornwall's pasty industry.

Under the new proposals, VAT will be charged on all food provided hot to be eaten hot whether it is kept in heated cabinets or in takeaway packaging. Food that is allowed to cool will be exempt. Cornish MP George Eustice has welcomed the move.

He said: "This is great news for the Cornish pasty industry and resolves all of the problems that had been raised by the industry". You can find out more on this story on our national site.

The government's agreed to closely consider possible changes to the so-called 'pasty tax'.

Plans to extend VAT to Cornish pasties and baked food were announced in the Budget, prompting protests from around the country. Today in Parliament a Cornish MP suggested it should NOT apply to food that's allowed to cool down, avoiding complex legal arguments.