Please turn on JavaScript. Media requires JavaScript to play.
Labour has condemned government U-turns on planned VAT rises to Cornish pasties and static caravans as a "shambles".
The U-turns from Chancellor George Osborne's Budget follows protests by bakers and caravanning enthusiasts.
The government has altered the definition of what is a "hot" pasty to allow the reversal of its plans.
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.
Labour's shadow chief secretary to the Treasury, Rachel Reeves, described the policy reversal as "a total and utter shambles".
She said: "These partial U-turns, just a few weeks after ministers were defending the pasty tax and caravan tax, show just how ill-thought through the Budget was and how out of touch David Cameron and George Osborne are."
Ms Reeves accused ministers of trying to avoid a Commons defeat on Labour's upcoming motion - especially after their support dropped over Parliament's last vote on the caravan tax.
After the amendment, food such as sausage rolls or pasties sold on shelves - that is, cooling down, rather than being kept hot in a special cabinet - will not be liable for VAT.
The definition of a "hot" pasty is being altered to allow the reversal, while a 20% charge due to be levied on static caravans will now drop to 5%.
The government said it had improved the policies after engaging with concerns.
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.
However, hot savouries including pasties and pies are exempt. The U-turn would effectively maintain this situation where they are left to return to "ambient temperatures" on shelves in bakeries and supermarkets.
Sheryll Murray, Conservative MP for South East Cornwall, said: "I told the government that I didn't want to see an army of thermometer-wielding tax inspectors poking our pasties and that I was really concerned about the vagaries of ambient temperature. They listened."
Liberal Democrat MP Stephen Gilbert, who represents Newquay, added: "The Cornish people have won and there will be dancing in streets from Land's End to the Tamar as people hear that the government has dropped its plans to clobber local people and local businesses with this tax."
Static caravans do not currently incur VAT. The new 5% rate will be delayed from October to April next year.
A Treasury spokesperson 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."
Are you affected by this story? Do you run a bakery? Or perhaps you own a static caravan? Share your thoughts with us using the form below.
No comments:
Post a Comment