PASTY fans across Huddersfield will be munching into their purchases safe in the knowledge that VAT will not be raised.
The Government is to reverse plans for “pasty taxes” in a U-turn which has been welcomed by retailers.
Following Chancellor George Osborne’s Budget announcement the government has now altered the definition of what is a “hot” pasty to allow the reversal of its plans.
Now, food such as sausage rolls or pasties sold on shelves – cooling down, rather than being kept hot in a special cabinet – will not be liable for VAT.
The move was welcomed by Marcus Hodge, director of Hadfield’s Bakery, which has 15 outlets across the Huddersfield area.
He said: “We hope the latest announcement will bring some clarity to the situation. To not introduce VAT on hot savouries is a welcome move.
“I was extremely concerned when it was first announced. Money is very tight at the moment. Unemployment in Yorkshire was very high. To push up the cost of lunches, it’s a lot of money.”
The announcement was also welcomed by pasty kings Greggs, who have five stores in Huddersfield.
Ken McMeikan, Chief Executive of Greggs said: “We are very pleased that the Government has listened to the bakery industry’s concerns and applaud them for simplifying the rules on VAT applicable to freshly baked products.
“This is great news for customers and I would like to thank them and all our staff for their wonderful support.”
During a parliamentary debate last week, MPs from all three main parties criticised Mr Osborne’s proposals, arguing they were unenforceable and would have an adverse impact on jobs and businesses.
Currently, VAT is not charged on most food and drink, or hot baked goods, but is payable on takeaway food sold to be eaten hot.
However, hot savouries including pasties and pies are exempt. The move will effectively maintain this situation where they are left to return to “ambient temperatures” on shelves in bakeries and supermarkets.
A Treasury spokesman said: “The Budget announced a consultation on a change to VAT on hot takeaway food, designed to remove inconsistency and ambiguity in the system and level the playing field across the takeaway food market.
“After extensive engagement we have improved the policy, addressing practical concerns, ensuring that the new regime could be as simple as possible to apply.
“We have addressed these in a way that allows us to remove the inconsistent VAT treatment, while not imposing any additional requirement on businesses to test the temperature of their products.”
