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Stephen Gilbert MPCornwall's voice in the Commons |
PASTY TAX: CORNISH MPS URGE CHANGES TO VAT PROPOSALS IN CONSULTATION RESPONSE
May 22, 2012 10:12 PM
Cornish Liberal Democrat MPs Stephen Gilbert, Andrew George and Dan Rogerson have submitted their response to HMRC's consultation on 'VAT: Addressing Borderline Anomalies' which has the effect of adding VAT to baked goods, such as the Cornish Pasty, sold over 'ambient temperature'.
The consultation was launched following March's budget in which Chancellor of the Exchequer, George Osborne, announced plans to change the VAT rules affecting a number of products including Cornish Pasties, dubbed the 'Pasty Tax'.
In their response, the Cornish MPs pointed to concerns over the implementation of the proposals, the additional anomalies the proposed change would create and the negative economic effects it would have on the industry and the Cornish economy, saying:
"It is likely that encouraging ambient temperature testing will lead to a plethora of inconsistencies and much confusion for bakeries, retailers and customers. ... The changes have the potential, as outlined above, to cost around £101,400,000 to the Cornish economy in total."
They went on to make an alternative suggestion which would mean VAT would not be charged when there is no attempt to keep a product hot after the cooking process has ended, as is often the case for Cornish pasties and other baked goods. They say:
"There can be change without the £101,000,000 damage to the Cornish economy currently foreseen.
"By making no attempt to keep the products hot, there will be a clear difference between those goods which are baked by their very nature but can be, and are, consumed cold and those goods which are cooked hot to order for the purpose of consumption."
Commenting, Stephen Gilbert said:
"The Government's plan is not only politically unpopular but will be flawed in practice and have devastating impacts on the Cornish economy and the industry as a whole. It is estimated that more than £100million would be lost from our local economy and 400 people would be made redundant.
"I accept the need to simplify the VAT system but the Government's plan would add anomalies not remove them. That's why I have been keen to work with the Government, not against them, to find a workable solution that is acceptable to the industry, is fair to the consumer and meets the needs of the Government.
"Over the last two months I have met with industry representatives on numerous occasions, presented a petition of almost 500,000 signatures to the Prime Minister, tabled an amendment in Parliament to block the Governments plans and presented the case to the Minister responsible. I will continue to put pressure on the Government and urge them to adopt the, very workable, alternative that I have set out."