Pasty tax row may roll on, Treasury minister warns

The government’s solution to the “pasty tax” row could still face legal challenges, a Treasury minister has said.

Exchequer Secretary David Gauke said the measure, which will keep a VAT exemption for baked pasties that cool naturally, was “fair and sustainable”.

But he acknowledged there had been a long history of legal battles over VAT on food products and “one can never rule out the fact that some people will be litigious”.

Ministers performed a U-turn over plans to impose VAT at 20 per cent on all hot takeaway food following a backlash from bakers and pasty manufacturers, who argued that food fresh from the oven but left to cool should not be hit by the tax rise.

Mr Gauke said: “It is fair to say that the current rules on the VAT liability of hot takeaway food have been made complex and unfair by a patchwork of different legal decisions over the decades.”