Pasty tax cause of confusion

The government’s plan to introduce a “pasty tax” has created “a quagmire of confusion and worry” for businesses, according to a Conservative MP who sits on the Commons committee which scrutinises the Budget.

Mark Garnier, a member of the Treasury Select Committee, said the plan to levy 20 per cent VAT on hot foods, including pasties, has dragged “innocent bystanders” into a move designed to stop supermarkets unfairly undercutting fast-food outlets.

He also raised the idea of exempting all fast food from VAT as a way of levelling the playing field and boosting consumer spending.