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Hot pies - plus VAT


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I see that full rate VAT is to be charged on hot pies etc from takeaway outlets like Greggs, and that the VAT will apply to any pie or pie- like object which is served warmer than "ambient room temperature". Now I've been round the block a few times, but this one seems to be one of the oddest things I've seen for quite a while - who will determine what is a hot pie, and what is a cold pie - will the VAT man come round with a thermometer and say "that one's VAT free" That one's not. Some outlets sell hot from a heated cabinet, and some sell hot from the oven, cooling down as they go, until the last knockings are sold at "ambient room temperature" - sounds line a recipe for confusion to me.

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A simpleminded attempt to close a rather silly tax loophole. Long overdue. Sadly the VAT system is full of them (The famous Jaffa Cake-biscuit) I don't know why (other than noisy shouts from the left) they simply remove all the anomalies (and arguments) and make one VAT (purchase tax) rate on everything. All he has done is to hand the lawyers another round of cases arguing about the silly detail of what is hot and what is not.

 

For someone who is claiming to want to simplify the tax system, I think he made it a whole lot more complicated yesterday. But then so has every chancellor before him. Certainly full of warmer than ambient room temperature air.

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Guest Natalie Graham

From my experience of the hot pie cabinet when I worked in a supermarket it won't make much difference. Customer helped themselves to a pie as they went in, ate it on the way round and hid the packet on the shelves long before they got to the checkouts.

 

As for increasing complication it can hardly be more open to constructive 'interpretation' by retailers and their lawyers than the previous distinction of whether it was being sold for consumption 'hot' or could be eaten cold and was 'in the process of cooling down'. Rather than creating an anomoly it would appear to correct one.

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Does that apply to chippie shop pies?

I mean taxed for getting pie-eyed and then taxed for pie and chips afterwards?

What is this great country coming to?

A tax on chippie salt and vinegar next......................... :vava_mini:

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There was a lot of complaints when there was VAT put on the fish and chips many years ago, so why should any business who sell hot food get away not charging VAT and another one has to charge VAT. At our local "Historic Gardens" they decided to call all their food sales as VAT items as at the time of perches they didn't know if it was to be eaten inside and have VAT on it or eaten outside with no VAT on it.

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Guest Natalie Graham

I thought these were already subject to VAT?

 

They were, but if you bought a 'hot' pie suppsedly in the 'process of cooling down' from the bakers next door to the chippie that pie wasn't. That is the anomoly that the budget closed.

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Why do you think some otherwise 'respectable' or 'upmarket' foreign food restaurants still have a 'take-away' counter, and put up with inebrieted customers walking/staggering in off the street at closing time [usually just as I'm trying to shepherd my wife/daughter out through the same door after paying a small fortune for a sit-down meal?

 

As I undertsand it, the take-away is VAT free whereas the chancellor takes a slice out of the pie served to you at the table.....

 

Now far be it for me to suggest that all 15cwt of lamb biriani was dutifully divied up into VAT paid or VAT free to the last 1/2oz, but there must be an awful temptation to submit that at least half of it went as 'take-away' with a more favourable tax outcome!

 

Doug

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Now far be it for me to suggest that all 15cwt of lamb biriani was dutifully divied up into VAT paid or VAT free to the last 1/2oz, but there must be an awful temptation to submit that at least half of it went as 'take-away' with a more favourable tax outcome!

 

I can assure you that the dreaded VATman is well aware of this wheeze and will impose high penalties and recovery on such miscreants. They use statistics gleaned from the many thousand biriani suppliers across the country and will take it for granted that your ratio of sales are the same as an equivalent establishment until the point at which you can prove otherwise. They also have eyes and ears on the ground to record say on a 'Saturday' night how many sit in and how many 'take out'. Once again if the accounts (if the business keeps them) show greatly different figures then it will be down to the business to show that the VATman is wrong.

 

How much simpler for all concerned if the tax was paid on every sale.

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I remember when VAT was first introduced in about 1974. It was levied only on sit down meals but not take-away. So we could (and did) order a steak and chips to take away from a restaurant but pay much less than those who chose to eat it at their tables.

 

Those were the days.

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Guest Natalie Graham

As I undertsand it, the take-away is VAT free whereas the chancellor takes a slice out of the pie served to you at the table.....

 

 

 

Hot takeaway food is standard rated, cold takeaway food is zero rated except for crisps, biscuits and so on that are normally standard rated. What was hapening was that bakeries and supermarkets with instore hot food areas were selling their pies, cooked checkens etc, which they aslo sell cold, hot and escaping VAT by claiming they were 'in the process of cooling down' and therefore not subject to VAT. The budget yesterday closed down that loophole.

 

Slightly off-topic but ordering a coffee on a Cal-Max ferry some miles off-shore a few weeks ago, I was asked if I was going to eat in or take it away. :O

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Posted · Hidden by Andy Y, March 22, 2012 - Inflammatory
Hidden by Andy Y, March 22, 2012 - Inflammatory

I see that full rate VAT is to be charged on hot pies etc from takeaway outlets like Greggs, and that the VAT will apply to any pie or pie- like object which is served warmer than "ambient room temperature". Now I've been round the block a few times, but this one seems to be one of the oddest things I've seen for quite a while - who will determine what is a hot pie, and what is a cold pie - will the VAT man come round with a thermometer and say "that one's VAT free" That one's not. Some outlets sell hot from a heated cabinet, and some sell hot from the oven, cooling down as they go, until the last knockings are sold at "ambient room temperature" - sounds line a recipe for confusion to me.

 

Who decides what is 'ambient room temperature'?

 

Different between Winter/Summer??

 

Another 'Con'(servative) move to screw more money out of us (don't mention the rise in fuel duty later this year - 3p or so a litre? Do they want us to go back to horse and carts..).

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Surely this would deprive the world of the joys of a good Partial Exemption Calculation

 

and in doing so make the paperwork and trauma for businesses an awful lot simpler. Not to mention the reduction of the VAT office having to waste taxpayer's money on fighting cases and investigating tax "wrong doers" the majority of whom simply cannot understand why there are different rates and different goods treated differently. A simple transactional tax on every item sold at the same percentage (no special case for luxury items no special case for food or location). A simple purchase tax fair and everyone knows where they stand.

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^^^

Simple single VAT rate on everything is only fair if the actual rate so imposed is no more than 10%, imagine the price of your daily newspaper, daily pint of milk and your little toddler's shoes going up 20% in one day!!!

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and in doing so make the paperwork and trauma for businesses an awful lot simpler. Not to mention the reduction of the VAT office having to waste taxpayer's money on fighting cases and investigating tax "wrong doers" the majority of whom simply cannot understand why there are different rates and different goods treated differently. A simple transactional tax on every item sold at the same percentage (no special case for luxury items no special case for food or location). A simple purchase tax fair and everyone knows where they stand.

Wasn't this how it used to be some years ago ? I think it was called Purchase Tax ( or something like that ) Before the dreaded VAT came in.

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Wasn't this how it used to be some years ago ? I think it was called Purchase Tax ( or something like that ) Before the dreaded VAT came in.

 

 

IIRC Purchase tax was 33% - eye watering and a reason why when the price of models is looked at from long ago they appear expensive (as well as usually being pretty poor). You've never had it so good :scratchhead:

 

Paul Bartlett

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Wasn't this how it used to be some years ago ? I think it was called Purchase Tax ( or something like that )  Before the dreaded VAT came in.

 

It was similar, but as with all taxes subsequent chancellors complicated it by increasing it on some items and not on others.

 

It is not beyond the realms of ingenuity to instigate transitional arrangements. for the items that are presently zero rated. In fact under the original legislation the items that are currently lower rated are supposed to be only transitional. "to help the poorest" as in theory the proportion of their "shopping basket" spent on these items are greater. Though I am yet to find anyone who is genuinely poor who can afford the "shopping basket" let alone most of the items in it.

 

The "transaction/purchase tax" does not have to be the temporary 20% or even 17.5% (or anywhere near it) as all the zero rated item will bring in new tax the headline rate could be reduced to make it fiscally neutral. OK so you will pay more for food, children's clothes, newspapers but would pay less for petrol, and just about everything else you pay for. There would also be big savings on the taxes currently evaded on biriani sales :yes:

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