Budget 2012

Hot pasties and caravans hit by changes to VAT quirks

 

A bodybuilding, Cornish pasty-munching, caravan-driving hairdresser would be holding his head in his hands at the changes to VAT.

The 20 per cent sales tax will be levied for the first time on body-building protein shakes, which are currently zero-rated – unlike ordinary soft drinks and sports drinks – the rent of chairs in hairdressing salons, and the sale of static caravans.

VAT will also be slapped on hot supermarket takeaway foods such as pasties and pies and rotisserie chickens, which are currently VAT-free, unlike meals from takeaway outlets such as kebabs and pizzas.

The Treasury said it wanted to iron out "loopholes and anomalies" in Britain's notoriously quirky VAT system. This imposes a 20 per cent sales tax on chocolate-covered biscuits, which are considered a luxury, but not on cakes, which are – touchingly – considered a necessity.

Many products will remain entirely VAT-free, such as children's clothes, printed books and newspapers.

The British Retail Consortium, which represents high-street retailers, including takeaway outlets and supermarkets, said: "The Chancellor is right to retain VAT exemptions on children's clothes, books and newspapers. As the Government considers the treatment of hot food we will be communicating the views of supermarkets and quick-service restaurants to its review."

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