Questions still surround pasty tax

16 May, 2013

Confusion still reigns regarding ‘pasty tax’, according to members of the Cornish Pasty Association (CPA), following the results of a recent survey.

More than six months after the new rules regarding VAT on hot takeaway foods came into force, the findings of a survey carried out by Cornwall Food & Drink, on behalf of the CPA, also found that some businesses that had introduced the tax, had seen sales drop from 10-30%.

Around 25% of members responded to the survey, commenting, for example, that the implementation of the new tax rules could not have come at a worse time, with consumers pockets being hit from all angles. They added that customers were still perplexed as to what the new tax rules meant - with some pasties VAT-free and some not.

The survey also found that while some businesses which had never had heated cabinets were not affected, a small number of respondents said they had already been applying VAT to hot products (before the tax was introduced) and now wondered whether they had overpaid in some instances.

Following the introduction of the tax, some bakers turned off their heated cabinets and have been baking smaller batches more frequently, but they said this had led to increased energy costs.

Other members said they had experienced greater wastage as people didn’t want cold pasties, while some respondents reported falling sales due to the addition of 20% VAT.

 





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