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Pasty Tax Scrapped

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6:01am 29th May 2012

Cornwall has won the battle against the pasty tax.

The government is backing down after protests in the Duchy got too hot to handle.

Campaigners had warned slapping on VAT would have cost four hundred jobs in Cornwall.

Newquay and St Austell MP Stephen Gilbert has been trying to get it blocked. He said, "I think they will be dancing in the streets from Land's End to the Tamar. The government has dropped their flaky proposals to tax our Cornish proposals. It is something that will mean jobs are secure, that investment in the industry is secure and is something that should be welcomed by one and all."

The rethink follows a consultation period which ended on May 18th.

A Treasury source said: "We rightly consulted, listened and are glad we have a solution that is fair."

While a Treasury spokesman 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."

Despite this, the VAT proposals remain complicated.

Under the new plans, tax will be charged on food that is provided hot or cooked to order.

It will also apply to items that are kept warm in hot cabinets or served in heat-retaining packaging – for example, a takeaway in foil-lined packaging.

Snacks which are advertised as hot will also be subject to the tax.

Camborne and Redruth MP George Eustice praised the Government's rethink. "This is great news for the Cornish pasty industry and resolves all of the problems that had been raised by the industry." he said.

"The Treasury should be given credit for the way they have approached the issue."

You can read the timeline of Cornwall's battle against the pasty tax here.

6:01am 29th May 2012

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