Euro MP Peter Skinner has expressed his dismay and disappointment at the government’s proposal to charge VAT on all food ‘sold above ambient temperature.’ Dubbed the ‘pasty tax,’ the proposal has attracted criticism from businesses across the sector and means that fresh hot prepared food will be taxed, whilst pre-packaged, pre-prepared food will not.
Currently VAT is not charged on most food and drink, but is payable on take away food sold to be eaten hot. Under the new rules all food above ‘ambient temperature’ will be subject to VAT at 20%, hiked up last year despite pre-election promises not to. The definition of that temperature has so far not been made clear, but it is likely to include foods sold by bakeries such as pasties and sausage rolls.
Chancellor George Osborne announced the changes in his budget alongside plans to charge VAT on sports nutrition drinks, hairdressing facilities and holiday caravans.
Peter Skinner MEP:
‘These recent proposals are yet another example of how this government is completely out of touch with the majority of people. Many are already struggling to pay their bills on a monthly basis and now they will have to face increasing prices on the basics.
Businesses are either going to have to swallow this tax or pass it on to their customers, putting them in a very difficult position. The government should be promoting growth and job creation, not placing additional financial burdens on traders and consumers who are already struggling.’