The government has made a U turn on the so called 'Pasty Tax' after a long campaign from those against it
The government has agreed to look closely at possible changes to the so-called "pasty tax".
Pasty makers from Cornwall have been in London protesting at government plans for a so-called 'Pasty Tax'.
Warrens bakery are returning to using warming cabinets after a fall in sales. The bakers stopped keeping their savouries warm after the government introduced a twenty per cent VAT charge in May.
A spokesperson for the company, which has 58 shops in the south west, said selling cold pasties had damaged business.
Pasty shops around the south west have been digesting the first day of new tax arrangements on some of their food.
The original proposal led to widespread protests, as the so-called 'pasty tax' on hot pies threatened to embarrass the Government.
But the Chancellor backed down, and now only food which has been reheated is subject to VAT.
Some in the industry say the new arrangements are confusing for both pasty sellers and consumers.
Our Cornwall Correspondent Steve Hardy has been to one pasty shop to assess reaction to the new tax:
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.