SCARBOROUGH’s MP has welcomed today’s reversal of two tax policies previously announced in the Budget earlier this year.
Robert Goodwill MP said the moves to change VAT arrangements for hot food and mobile homes – dubbed the pasty and caravan taxes – were a good example of compromise.
Speaking today he said that it had been proposed to set a VAT rate on mobile homes bought for holiday accommodation but this had been reduced.
He added: “Follow ing representations from a number of MPs, including myself, they have announced they are going to reduce it to five per cent – that’s good news.”
Mr Goodwill added that there were greater concerns in the Yorkshire and Humber region that the move would have had a negative impact on a lot of companies in the tourist industry.
He said: “For example at the Flower of May site if you want want a van on their site you have to buy a van from them – it’d have a big effect on employment on the east coast.
“I think it’s a very welcome changein policy and it shows that where concerns are raised the Government is prepared to listen.”
Mr Goodwill said that the proposed “pasty tax” was a big concern in the south west of England but he did not envisage it would have had such a big effect on the local economy.
It had been proposed to imposed a 20 per cent VAT rate on baked products if they were heated – but the move attracted a groundswell of protest and today a compromise was announced.
Under today’s proposal not VAT will be charged if the pies and pasties have been heated up and allowed to cool naturally VAT would only be charged if they are kept warm or heated to order.
The MP said: “If the pasty or pie is hot because its just been made then its a zero rate but if it’s kept hot in a cabinet that will attract VAT.
“It is good news for Woodheads, Hardies, Cooplands and Greggs – it’s a reasonable compromise.”