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Monday 2 April 2012

Booker Gives It Some Pasty

Nothing puts Christopher Booker off: no matter the level of derision at his penchant for telling whoppers, he keeps on coming back with more of them. One can only conclude that enough Telegraph readers believe his witterings, which have now extended to asserting that the row over VAT on hot Cornish pasties is all the doing of those dastardly “Eurocrats” in Brussels.

Basically, it's like this

Booker has recycled a post by his pal Richard North in which the latter cites the case of one Manfred Bog, who sells hot sausages from his vans at local markets, and who successfully took his case to the European Court of Justice (ECJ). Bog argued that the action of selling hot wurstel was not sufficient to make it subject to higher VAT as it was merely a sale of goods, and not a service.

This excited VAT practitioners around the UK to the thought of getting significant tax rebates for their clients. But HMRC concludedHMRC considers that the ECJ judgment has no implications for the UK treatment of supplies of hot food and businesses should continue to treat their supplies in accordance with published guidance” a year ago, so that was that.

But, it seems, not for Booker, who asserts that VAT is all down to the EU, which fails to address the fact that the UK adopted VAT in 1971, two years before it joined the then EEC. VAT is a straightforward and efficient revenue raiser, unlike the cumbersome and opaque Purchase Tax that preceded it. And at the outset, VAT was imposed on cafes and restaurants, but not takeaways.

It was only later that hot takeaway food was also subject to VAT, and things like sausage rolls and Cornish pasties were exempt as they were hot because of the baking process, not because of further preparation for sale. What the Budget change is doing is not closing a loophole, as Booker infers, but extending the scope of VAT on takeaway foods.

And the Government is doing this not because the EU says it has to, but because it can. Zelo Street readers will already be aware of member states’ freedom to use the VAT system as they wish: I’ve looked previously at moves by successive Governments in Portugal to move many types of goods up the VAT scale, including gas and electricity bills which now attract the top rate (see HERE, HERE and HERE).

If Booker and North were even close to being right, there would still be hordes of takeaway food providers queuing up for VAT rebates, whatever was in the Budget (the rule is not retrospective). There are precisely none. Still, it keeps dear old Chris in Telegraph paydays, and some of their readers get a nice warm feeling out of those columns, so that’s all right, then.

1 comment:

acro said...

Another rule foisted on Britain, indeed. The minutes from the Council show that Britain (like all other Member States) voted in favour of the Directive back in November 2006: