The pasty tax: how much more will you need to pay?
The so-called "pasty tax" is here but what does this mean and how is it affecting the price of takeaway food?
The controversial pasty tax has come into force today, pushing up prices on certain takeaway foods by 20% in an attempt to raise £110 million for the Treasury.
Plans to place a 20% VAT rate on hot takeaway foods, later dubbed the ‘pasty tax’, were first announced by Chancellor George Osborne back in the March Budget.
But the move prompted widespread outcry leading to a Government U-turn in May.
The pasty tax
Across the country the "Save Our Savories" campaign began, largely supported by the National Association of Master Bakers and the high street bakery Greggs, after the Chancellor first announced these plans. It accused the Government of attacking small businesses and waging class warfare on those eating the hot savoury snacks.
After the outcry, the rule was changed in May to only apply to food which is cooked and then kept warm for customers, such as rotisserie chicken or cheese burgers sold from vans.
From today, prices of certain types of food will go up to meet the VAT rise, but there are fears this could push struggling businesses into bankruptcy. This is not just because they will have to up their prices, but also those selling pasties or hot chestnuts, for example, could be in line for massive fines if they ignore the new VAT rules.
What’s changing?
Foods which have been cooked and then left to cool, such as sausage rolls or Cornish pasties, are exempt from the ruling so the price will remain the same.
This also applies to baked goods which are served to you straight out of the oven, as although they’re still warm they’re not being kept artificially warm by a device like a hot plate.
Those which are cooked and then kept warm either by being placed on a hot plate or in a warm cabinet will now face a 20% tax .
This applies to foods such as rotisserie chickens, burgers or fish and chips. For example, a rotisserie chicken which yesterday cost £3 would today be £3.60 and a cheese and tomato croissant, kept in a hot cabinet and priced at £2 will now cost £2.40.
Don’t tax our roast
Groups across the country have spoken out against the tax and the campaign, led by supermarket chain Morrisons and the British Poultry Council. "Don’t Tax Our Roast" has now attracted more than 30,000 signatures.
It focuses mainly on rotisserie chicken and says the 20% VAT would result in consumers buying 73,000 fewer birds from the supermarkets every week. To emphasis the point, on Pinterest supporters have posted pictures of their Sunday roasts.
Netmums has also got on board with the campaign and its latest research shows 86% of families eat rotisserie chicken and of these 40% will stop now the tax has been introduced.
What do you think about the pasty tax? Will it stop you buying certain hot goods or do you think it should cover a wider range of products? Let me know in the comment box below.
More from lovemoney.com:
Things you can get for free this month
Ed Balls calls for two-year first-time buyer Stamp Duty holiday
How often should you review your pension?
Comments
Be the first to comment
Do you want to comment on this article? You need to be signed in for this feature