Pasty VAT hike 'will cost jobs in Cornwall'
- 10 April 2012
- From the section Cornwall
Adding VAT to pasties will cost jobs in Cornwall, a trade association has said.
The government announced in the Budget that the 20% levy would be added to the price of hot savouries from October.
The Cornish Pasty Association said the food industry was one of the largest employers in Cornwall and the tax would therefore affect a greater percentage of the county's economy.
It said the Treasury should rethink the plans but the government said it was to ensure VAT was "fairly applied".
VAT, currently at 20%, is not charged on most food and drink - or hot baked goods - but is payable on takeaway food sold to be eaten hot.
Ministers said all food sold "above ambient temperature" should carry VAT.
Cornish Pasty Association chairman Mark Muncey said that the organisation was "very concerned" about the potential impact of the change.
He said: "Collectively, the Cornish pasty industry accounts as one of the largest employers in Cornwall.
"Therefore, this is going to affect a greater percentage of the Cornish economy than the rest of the country."
He added that retailers were already anticipating a reduction in retail sales and some were "already talking about the need to close marginal shops, which will lead to job losses".
The government is consulting on the proposed changes. The deadline for responses is 4 May.