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Volume 547: debated on Tuesday 3 July 2012


Tuesday 3 July 2012



Value Added Tax on Savoury Products

The Petition of customers and staff of Greggs plc and other businesses,

Declares that the Chancellor of the Exchequer’s Budget proposals to introduce 20% VAT on savoury products served above ambient temperature will adversely impact the public at a time when they can least afford it; and that savouries that are not held hot should not be considered as hot takeaway food and should be zero rated for VAT.

The Petitioners therefore request that the House of Commons urges the Government to reconsider their proposals to levy VAT on freshly baked savouries which are cooling down in an ambient counter.

And the Petitioners remain, etc.—[Presented by Mrs Mary Glindon, Official Report, 26 April 2012; Vol. 543, c. 1207.]


Observations from the Chancellor of the Exchequer, Treasury:

The Government thank my hon. Friend the Member for North Tyneside (Mrs Glindon) for her petition on VAT on freshly baked savouries which are cooling down in an ambient counter.

On Budget day the Government published a consultation on application of the standard rate of VAT to all hot takeaway food with a view to correcting anomalies in the VAT system. The consultation closed on 18 May.

Having listened to responses to the consultation, including responses from Greggs and other businesses, we propose to tackle the inconsistent treatment of takeaway products in a different way.

We propose to keep the existing subjective test which taxes food which is provided hot for the purposes of allowing it to be consumed above the ambient air temperature. But we propose to add to it a number of new objective tests to prevent the anomalies that have arisen as a result of case law over the years.

We therefore propose to apply VAT to all hot food which is:

provided hot for the purposes of allowing it to be eaten hot (the existing criterion); or

cooked or heated to order—this would capture food where the purpose of cooking/heating is clearly to provide hot food (for example toasted sandwiches); or

kept hot, or where the natural cooling process is delayed—this would cover instances where businesses kept food hot in hot cabinets, hot plates, heat lamps etc or where heat is applied in order to slow the cooling process (this would retain zero-rating for Cornish pasties and sausage rolls where they are cooling naturally in the racks, but not when they are stored in heated cabinets); or

provided in heat retaining packaging or other packaging specifically designed for hot food—where the use of such packaging is a clear indicator that food is being kept hot to be consumed hot; or

which is advertised/marketed as hot.