The UK government announced on May 29 that it has canned plans to tax pies, pasties and sausage rolls.
Since March this year, the government has been facing heavy criticism over the proposed tax, particularly because it seemed to be targeting working-class families.
Cameron essentially wanted to close a loophole which allows bakeries in the UK to serve hot takeaway food like pies, sausage rolls and pasties without incurring the 20 per cent VAT that applies to hot food sold as takeaways from restaurants.
Defending the decision, Prime Minister David Cameron previously said it was unfair that takeaway restaurants like fish and chip shops had to charge VAT on hot food, while bakeries and supermarkets were exempt.
But the government has now done a U-turn, by amending the definition of what constitutes a “hot” pasty. Under the revised plans, food which is cooling down rather than being kept warm will not be liable for VAT.
VAT will now only apply to food served straight from the oven or kept hot in heat-retaining packaging, hot cabinets or on hot plates.