Pasty tax

"Pasty tax"was a popular phrase used by the British press to describe a proposal in the2012 United Kingdom budgetto simplify the tax treatment of "hot takeaway food" so thatValue Added Tax(VAT) would be charged at 20% in all cases.  The change would have increased the sale price of hot snacks such assausage rollsandCornish pastiessold on the premises where they were baked. TheChancellor of the Exchequer,George Osbornedelivered the proposal of the so-called "March Budget".
Under long-standingVATlegislation, sale of most foods bought to eat or cook at home is zero-rated for VAT, meaning that no tax is charged.  By contrast, meals bought and consumed in a restaurant, and hot take-away food or drink, are charged at a standard 20% tax rate. At the boundary between these two classes, there has been a history of legal challenges around food which is baked for sale, and is sold while still hot.  If food could be claimed to be hot only incidentally, it could be zero-rated - this would apply to freshly baked bread, but also pies, pasties and similar items.This legislation stated:
In the March budget papers, the Government published a paperwhich claimed:
The document proposed to
In response to the ensuing row, a number of campaigns were launched in order to try to prevent the tax rise on theCornish pasty. These ranged fromThe Sun's "Who VAT all the pies" campaign to an online petition set up by theCornish Pasty Associationentitled "Don't Tax My Pasty".
ALabourMember of Parliament (John MannMP) asked theChancellor of the Exchequer,ConservativeMP George Osborne, about when he had last eaten aCornish pasty. Osborne answered that he had no idea, and this answer was used to allege that the Conservatives had become "out of touch" with ordinary people. ThePrime MinisterDavid Cameronlater said that he had recently eaten a Cornish pasty atLeeds railway stationand enjoyed it. However, theWest Cornwall Pasty Companyoutlet at that station had closed two years previously.
The issue, which at first appeared to be unimportant, was then taken up by several other newspapers and politicalcommentators. The VAT rise on the pasty would affect both these customers and the pasty industry itself:Greggs, the largest British bakery chain, warned that the tax would harm its business and lead to store closures,and petitions to oppose the tax were signed by over half a million people.These newspapers and commentators made fun of David Cameron's attempt to show himself as a regular pasty eater(i.e. as one of the people) and George Osborne's inability to remember when he had last eaten one.Cameron defended the proposition and said that the move would defend takeaway restaurants against competition from major chains.
The "pasty tax" was one of the issues cited byLeader of the OppositionEd Milibandwhen he labelled the 2012 budget an "omnishambles", a word coined by political comedy seriesThe Thick of It.The word saw continued usage in the media,and was included in theOxford English Dictionaryin 2013.
After the public opposition, Osborne significantly altered the plans in late May, which was characterised as a "U-turn".A 2014 study observed that the "pasty tax" affair, although only a small change to the VAT rules, demonstrates that making changes to the VAT system is very difficult, and may itself have caused damage to VAT reform efforts.A separate 2014 editorial argued that the backlash to the "pasty tax" and theDanish"fat tax" have made it unlikely for politicians to attempt to impose taxes on foods thought to causeobesity.However, in 2018 the UK introduceda"Soft Drinks Industry Levy", on sugary soft drinks. Specifically pitched as a tax to prevent childhood obesity,the tax was more successful.