Finance Bill — New Clause 5 — VAT on Hot Baked Goods — (Pasty Tax) — 18 Apr 2012 at 19:50

The majority of MPs voted in favour of charging VAT on hot baked goods such as pasties even if they were not specifically kept hot for consumption.

During his budget statement the chancellor George Osbourne MP said[1]

  • We will also address some of the loopholes and anomalies in our VAT system.
  • ...
  • Hot takeaway food on high streets has been charged VAT for more than twenty years; but some new hot takeaway products in supermarkets are not.

The proposed law became known as the Pasty tax.

Paragraph 1.202 of the Budget Document[2] expanded on the speech and stated:

  • The Government will also close loopholes in the VAT system to prevent avoidance and ensure compliance. From 1 October 2012, VAT will be extended to close loopholes, including by applying it to hairdressers’ chairs (to make clear that their rental is already subject to VAT), static holiday caravans (to bring in line with mobile caravans) and certain hot food (because most hot food is already subject to VAT).

Details of the Government's proposals had been put to consultation prior to the budget[3], they provide yet more information on the intent of new measures as being:

  • to clarify the treatment of catering to ensure that all hot takeaway food is taxed


  • although many retailers and take away outlets charge VAT on the sale of hot chicken products, hot pies and toasted sandwiches, some retailers and bakery chains sell similar products zero-rated.
  • ...
  • The changes will apply VAT at the standard rate to all food which is at a temperature above the ambient air temperature at the time that it is provided to the customer, with the exception of freshly baked bread.

The proposed new clause which was rejected in this vote stated:

  • No new Order shall be made under section 30(4) or 31(2) of the Value Added Tax Act 1994 which shall affect baked products when no attempt is made to keep the product hot for consumption.’

This new clause would have prevented the chancellor from introducing VAT on baked goods, such as pasties, if they were not specifically kept hot for consumption.

While during this vote the majority of MPs voted in support of introducing a "pasty tax"; subsequently Schedule 26 paragraph 2 part 4 of the Finance Act 2012[4] was added to the Finance Bill to explicitly exclude food left to cool naturally from VAT.

Debate in Parliament | Source |

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Party Summary

Votes by party, red entries are votes against the majority for that party.

What is Tell? '+1 tell' means that in addition one member of that party was a teller for that division lobby.

What are Boths? An MP can vote both aye and no in the same division. The boths page explains this.

What is Turnout? This is measured against the total membership of the party at the time of the vote.

PartyMajority (No)Minority (Aye)BothTurnout
Alliance0 10100.0%
Con262 (+1 tell) 10089.2%
DUP0 5062.5%
Green0 10100.0%
Lab0 228 (+1 tell)089.1%
LDem33 (+1 tell) 4 (+1 tell)068.4%
PC0 2066.7%
Respect0 10100.0%
SDLP0 2066.7%
SNP0 60100.0%
Total:295 260086.9%

Rebel Voters - sorted by party

MPs for which their vote in this division differed from the majority vote of their party. You can see all votes in this division, or every eligible MP who could have voted in this division

Sort by: Name | Constituency | Party | Vote

Philip DaviesShipleyCon (front bench)aye
George EusticeCamborne and RedruthCon (front bench)aye
Gordon HendersonSittingbourne and SheppeyCon (front bench)aye
Philip HolloboneKetteringCon (front bench)aye
Anne MainSt AlbansCon (front bench)aye
Sheryll MurraySouth East CornwallCon (front bench)aye
Sarah NewtonTruro and FalmouthCon (front bench)aye
Matthew OffordHendonConaye
Mark RecklessRochester and StroodCon (front bench)aye
Gary StreeterSouth West DevonCon (front bench)aye
Andrew GeorgeSt IvesLDem (front bench)aye
Stephen GilbertSt Austell and NewquayLDem (front bench)tellaye
Dan RogersonNorth CornwallLDem (front bench)aye
Adrian SandersTorbayLDemaye
Ian SwalesRedcarLDem (front bench)aye

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