NoPasaran1936
27th March 2012, 19:09
The tax status of Cornish pasties has caused an unexpected backlash against the Chancellor, after he imposed VAT on hot baked goods bought from supermarkets and bakers in the Budget.
Greggs, the high street chain, has warned extra VAT on the hot snacks will cause a decline in sales, while businesses in the south-west are claiming there could be job losses in the Cornish pasty industry.
Mr Osborne was yesterday under pressure to clarify exactly how the new tax will be implemented, as he gave evidence on the Budget to the House of Commons Treasury Committee.
MPs on the Treasury Select Committee also made fun of the fact the Chancellor "can't remember" when he last bought a pasty from Greggs. "That sums it up," said Mr Mann, implying the Chancellor's experience of hot snack consumption on the high street may be limited.
Raising one potential problem, John Mann, a Labour MP, said a lukewarm pastry would be taxable in cold weather, but not in hot weather, because of different ambient temperatures".
Mr Osborne insisted the tax made sense, but said the Government would not check the temperature of every pasty sold.
"I am seeking to stick with the position that hot takeaway food has VAT on it, he said. What we are trying to do is make sure that hot takeaway food has VAT on it.
"The way we operate with companies and large retail chains and the like is that we don't do a check on every product sold. We come to an agreement with companies over what proportion of their products are sold hot.
Mr Osborne was appearing in front of the committee to explain his Budget, which gave a cut in income tax to the highest earners from 50p to 45p in the pound.
Asked whether the decision was permanent, he said: The 50p rate was assigned a special status by my predecessor and by me as being temporary. I dont assign any special status to the 45p rate.
Now, I know capitalists want capitalists as the Chancellor of the Exchequer, but surely you'd want a Tory with a degree in economics, and not a 2nd class honours (which he only just passed) in BA History?
Greggs, the high street chain, has warned extra VAT on the hot snacks will cause a decline in sales, while businesses in the south-west are claiming there could be job losses in the Cornish pasty industry.
Mr Osborne was yesterday under pressure to clarify exactly how the new tax will be implemented, as he gave evidence on the Budget to the House of Commons Treasury Committee.
MPs on the Treasury Select Committee also made fun of the fact the Chancellor "can't remember" when he last bought a pasty from Greggs. "That sums it up," said Mr Mann, implying the Chancellor's experience of hot snack consumption on the high street may be limited.
Raising one potential problem, John Mann, a Labour MP, said a lukewarm pastry would be taxable in cold weather, but not in hot weather, because of different ambient temperatures".
Mr Osborne insisted the tax made sense, but said the Government would not check the temperature of every pasty sold.
"I am seeking to stick with the position that hot takeaway food has VAT on it, he said. What we are trying to do is make sure that hot takeaway food has VAT on it.
"The way we operate with companies and large retail chains and the like is that we don't do a check on every product sold. We come to an agreement with companies over what proportion of their products are sold hot.
Mr Osborne was appearing in front of the committee to explain his Budget, which gave a cut in income tax to the highest earners from 50p to 45p in the pound.
Asked whether the decision was permanent, he said: The 50p rate was assigned a special status by my predecessor and by me as being temporary. I dont assign any special status to the 45p rate.
Now, I know capitalists want capitalists as the Chancellor of the Exchequer, but surely you'd want a Tory with a degree in economics, and not a 2nd class honours (which he only just passed) in BA History?