The British government was set to back down over plans to introduce a tax on Cornish pasties and other hot snacks, after critics accused it of targeting working families, the Treasury said yesterday.
The government has been embroiled in the row since March, when it announced plans to close a loophole that allows bakeries in Britain to serve hot takeaway food without charging 20 percent VAT.
The items include pies, sausage rolls and pasties, a traditional delicacy consisting of meat and vegetables in a pastry crust.
But the government has amended the definition of what constitutes a “hot” pasty, allowing it to perform the U-turn, according to a BBC report.
Under the revised plans, food that is cooling down rather than being kept warm in a heated display cabinet will not be liable for VAT.
Junior Treasury minister David Gauke told the BBC that “after extensive engagement”, the department had “improved the policy, addressing practical concerns, ensuring that the new regime could be as simple as possible to apply”.
The issue has been an embarrassing sideshow for Prime Minister David Cameron, who has fended off suggestions that the tax highlights his lack of a “common touch”.
Cameron had said earlier that it was unfair that takeaway restaurants had to charge VAT on hot food, when bakeries and supermarkets did not.
I am a pasty eater myself. I go to Cornwall on holiday, I love a hot pasty,” said Cameron, who was educated at the elite Eton College and then at Oxford University.
Labour’s Chris Leslie, the shadow Treasury minister, said the U-turn proved the government “can’t think through policies before it makes announcements”. He said consultations should have been done before the tax was hiked.