Monday, March 26, 2012

VAT shall not go on bread alone

It is rather amusing to see a Conservative government caught out by some of those same EU VAT directives (namely 2006/112/EC) which so plagued Gordon Brown's first budget back in 1997. New Labour had been elected on a pledge to get rid of the iniquitous 'Tory tax' of VAT on domestic fuel which had been imposed by Norman Lamont. But at the dispatch box, Mr Brown intoned: "I would like to abolish VAT on fuel. But European rules prevent me from doing so. Therefore, VAT will be cut to the lowest level compatible with European law, that is 5 per cent from 1st September, well in advance of winter fuel bills." If ever there was an admission that Parliament is no longer sovereign with regard to taxation, this was it.

 And last week, George Osborne announced: "Hot takeaway food on high streets has been charged VAT for more than 20 years; but some new hot takeaway products in supermarkets are not... We're publishing our plans today to remove loopholes and anomalies..." Now, this has the Cornish up in arms, for their national regional dish, the Cornish pasty (for which there is an appreciative association), will now increase in price by 20 per cent. Along with sausage rolls and chicken pies and other foodstuffs which are routinely consumed warm, though not necessarily so.

Which brings us to bread - the staple foodstuff of life. If it be purchased warm from the bakery, should it not now be subject to VAT? Or may it now only be sold VAT-free when cool? This is rather an important consideration, for under those same 'European rules', once VAT has been levied on a product, it cannot be removed: 'ever closer union' prohibits re-zero-rating and demands incremental tax harmonisation throughout the Union. And so the rate of VAT on a Cornish pasty purchased in Penzance must (eventually) be identical to the rate of VAT on a Cornish pasty purchased in, err... Marbella, or wherever else on the Coast del Sol they might happen to be on sale.

But, as the Daily Mail highlights, there is something of a disagreement over precisely what constitutes 'bread'. If it be 'basic food', then the pasty in Cornwall should also be exempt. And what of ethnic breads - naan, puri or chapati, for example? Under equality legislation, the Government is now obliged to carry out an assessment of every one of its policies to ensure that no protected minority will be unfairly discriminated against. Surely, if hot 'white bread' is VAT-free, so must all the Asian breads be. Not to mention Chinese breads like mantou. And what about pizza? It is usually served hot, but may certainly be eaten cold, and is constructed upon a base of bread. If 'British' bread (ie your average leavened Hovis-looking thing) is to remain VAT free, His Grace is persuaded that there might be merit in a class action brought against HM Government by the Indians, Pakistanis, Greeks, Italians and Chinese who now reside in the UK, for it is surely illegal to discriminate against their breads.

Which brings His Grace to the Eucharist. We are aware that wine has been subject to VAT since 1st April 1973, when the tax was introduced to the UK. But what of communion wafers under George Osborne's proposals? Are they not a 'loophole and anomaly'? Why should the religious have access to VAT-free bread, while the heathen get stung for an additional 20 per cent? Food and drink (unfermented) for religious and sacramental use has always been zero-rated, and this includes communion wafers used in the celebration of the Eucharist. But what of (say) the Baptists who tend to use your more Hovis-looking thing? Is this to remain VAT free while the consecrated host of the Roman Catholics is taxed by the state? Or is it only when transubstantiated above the ambient air temperature to the warm body temperature of Our Lord?


Blogger Mr Integrity said...

Your Grace,
When is bread not bread? My family like a multiseeded bread from the supermarket, baked on the premises and sliced to order. Is this 'speciality bread’ different from plain bread. Does the slicing count as a service? And if it has just come out of the oven and is warm, is it different from the cold loaves on the shelf?
What is this Blog about? Is it about the complexity of VAT regulations, inequality between different social groups bread preferences or is it about EC interference in our tax system?
It seems to be about all three but I would put my money on the problem being the EC's requirement for tax harmonisation and interference which I despise.

26 March 2012 at 11:05  
Blogger Mr Integrity said...

This comment has been removed by the author.

26 March 2012 at 11:15  
Blogger non mouse said...

It scrolled last time I highlighted it, Mr. I.

Then it refused to delete- twice, for odd reasons (at least one was wrong).

Then it deleted anyway, but I'd already used the clipboard for something else.

The little man on the Chinese mountain has improved it all again.

26 March 2012 at 11:25  
Blogger Preacher said...

Being in the E.U gets dafter by the day. We need to 'Make an excuse & leave' or if that's not acceptable, just leave!.
A good laugh though for a Sunny spring Monday morning.
Can we expect your good self Doctor Cranmer to be shortly joining the ranks of UKIP in light of this present insanity?.


26 March 2012 at 11:29  
Blogger bluedog said...

God moves in a mysterious way His wonders to perform, Your Grace.

The solution would appear to be simple. Ignore the scala mobile VAT diktat of the EU and declare that every meal is a celebration of the Eucharist so that both bread and wine are zero rated in perpetuity. And for the purpose of defining bread, allow that anything made of dough, both leavened and unleaven, qualifies.

Now if UKIP announce this as policy they would surely win government at the next General Election.

Off topic, but how much does one have to pay to avoid having dinner with Nick Clegg?

26 March 2012 at 12:12  
Blogger bluedog said...

... or even worse, breaking bread with Francis Maude?

26 March 2012 at 12:20  
Blogger Jon said...

Or we could just remove all the anomalies and have a single VAT rate for everything, and a cut across the board as a result. This would be preferable in my view.

I remember reading about a test case that HMRC sought to establish that Jaffa Cakes were actually biscuits. What a ridiculous use of taxpayer's money!

26 March 2012 at 12:42  
Blogger Mr Integrity said...

His Grace is going to pay £250K for dinner with Dave and get it all sorted!

26 March 2012 at 13:00  
Blogger Mr Integrity said...

This comment has been removed by the author.

26 March 2012 at 13:00  
Blogger G. Tingey said...

The lowest rate for VAT is ZERO.

No problem then.
Or is there?

26 March 2012 at 13:26  
Blogger The Way of Dodo the Dude said...

You've overlooked Irish soda bread and Irish farrels.

26 March 2012 at 13:58  
Blogger Mr Integrity said...

And Potato Bread from Ulster Dodo

26 March 2012 at 15:29  
Blogger Office of Inspector General said...

Your Grace. Something deeply insidious about taxing bread, or any food come to that, that doesn’t come from a fast food retailer. They’ll tax water next, what ! No, far better to punitively tax short haul air flight. Use the trains and the boats. It’s what they’re therefore, you know...

Oh yes, and a 1000% VAT on chewing gum. And £ 100 fines + VAT for spitting it out on the pavement. It’s the devils product, ghastly stuff…

26 March 2012 at 17:55  
Blogger The Way of Dodo the Dude said...


The fadge cake is Irish - none of this Ulster nonesense, please!

What about the good old English bread pudding too?

26 March 2012 at 17:56  
Blogger Old Blue Eyes said...

Methinks a new football chant is in the making - "who taxed all the pies".

26 March 2012 at 18:07  
Blogger Mr Integrity said...

Have you noticed how His Grace has reduced the size of his Twitter box. No doubt so that he can get more advertising displayed. I wonder if he charges VAT?

26 March 2012 at 19:32  
Blogger ENGLISHMAN said...

Since allied bakeries and warburtons bread is now "halal",who wants to eat it anyway,apart from the followers of mohamed ibn kalb,tax it as much as you like,i make my own,and if there is any praying over it to be done ,i will do it and enthusiastically discriminate against indian,pakistani,greek and italian breads.

27 March 2012 at 07:41  
Blogger Mark In Mayenne said...

We are clearly going to have to go shopping equipped with thermometers, and wait to buy bread until it has cooled.

"Baker, this bread is now at 23 degrees, and is officially not hot. I claim my 20% discount"

27 March 2012 at 07:41  
Blogger English Pensioner said...

I wonder what the situation will be at our local shop. He sells cold pies, pasties, etc, but has a microwave oven so that customers might heat them if required.

27 March 2012 at 10:00  
Blogger len said...

Marie Antoinette told the peasants to 'eat cake'.

Cameron has substituted 'pasties' for cake then charged them tax on it.Has Cameron gone'one better'?

1 April 2012 at 08:56  

Post a Comment

<< Home

Newer›  ‹Older