With the 'pasty tax' being all over the papers, are
we really moving closer towards a level playing field?
What is normal in the world of food and catering?
The Government's intended removal of 'anomalies' has
revived the debate on fair taxation and a level playing field in
relation to food stuff and catering. Despite the nation's
emotional attachment to zero-rated pasties, it would actually
appear quite reasonable to subject hot pasties to the standard rate
of VAT – just like all other hot take-away food. However,
in relation to food and catering, anomalies seem to be pretty much
the rule rather than the exception.
The UK has a derogation which permits slightly different rules
to other EU member states. Further, the introduction and invention
of new food and drinks over time, as well as the development of
case law, makes it difficult to establish the VAT liability of many
items with any certainty. Often-quoted examples are the different
treatments of cakes
