Government sounds retreat over controversial tax plans

THE GOVERNMENT has been forced to climb down over two controversial tax measures announced in the March Budget.

Chancellor George Osborne has been forced into a U-turn over plans to charge VAT on hot takeaway food from bakeries and supermarkets, while also amending plans to tax static caravans at the full rate of VAT.

The Treasury said yesterday that the so-called “pasty tax” would not be applied to food that is cooling down after being removed from the oven, even if it is still hot at the time of purchase.

In addition, tax levied on static caravans that are used as holiday homes will be cut to 5% from April next year.

The amendments are expected to cost the Treasury £70m.

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