SO PASTIES will retain their financial palatability (not necessarily their warmth) after the chancellor backtracked on the introduction of a VAT on ‘hot’ pasties, pies and sausage rolls.
With the breaks firmly put on the static caravan VAT increase as well, it’s been an embarrassing climbdown for the government’s chief numbercruncher.
Accountants and advisors can now breathe a sigh of relief, particularly those representing food businesses in the south-west.
Tax experts in general will just be shaking their heads, some knowingly and some in frustration.
There’s no doubt that, overall, the coalition has provided some stability to the tax system. Its attempts to simplify tax are moving, albeit slowly. Easy wins have been gained, but sorting out the big’uns, IR35 and income tax/NICs integration, are still a long way off. Controlled foreign companies rules are still due to be really put under duress, while retrospectively aimed tax attacks have brought back some unwelcome memories.
Let’s not forget that the length of the tax code is still heading in the wrong direction.
Most of the compliments thrown at the government have come over the Treasury/HMRC tax consultation process which, for the most part, has been a much more thought-out and collaborative process.
So when caravans, pasties or North Sea oil profits are hit with taxes out of the blue, without consultation, it’s doubly disappointing.
Maybe George Osborne has had his fingers burned by this political hot, erm, pasty. Stone-cold logical consultations, please, with plenty of time given to reach the ‘ambient temperature’.
Kevin Reed is editor of Accountancy Age
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