BRC speaks out against ‘pasty tax’

Retail bosses are backing plans to amend the government’s Finance Bill, which would lead to a scrapping of the proposed ‘pasty tax’.

The amendment is due to be debated in the House of Commons this evening (Wednesday) and the British Retail Consortium (BRC) has submitted evidence to MPs to demonstrate that the proposed tax would hit people who could least afford it hardest. It claimed the move would lead to job losses and cause further damage to the already beleagured high street.

The BRC said it was publishing that evidence today, along with its initial submission to the Treasury, which sets out retailers’ opposition to any extension of the scope of VAT.

In the letter, BRC director general Stephen Robertson said: “Far from removing borderline anomalies, these proposals would result in greater uncertainty for retailers and added costs for consumers. This will deter investment in already struggling high streets, undermine the government’s Portas response and damage job creation.” 

The BRC said its evidence showed that people would switch from hot pasties and sausage rolls to cheaper, zero-rated, products. That means the Chancellor will be damaging retailers and suppliers, but raising little extra tax revenue.

Robertson’s letter goes on to say that the proposals “will merely create new anomalies that will, no doubt, be tested in the courts” and added: “While the concept of ‘ambient temperature’ may be well understood, a precise and legally reliable definition is impossible.”

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