The summit, to be attended by representatives from Cornwall’s pasty industry, has been organised by tax experts from Francis Clark with Winter Rule, Cornwall’s largest firm of accounts, which has branded the proposed reforms ‘unworkable’.
It will also be attended by St Austell and Newquay Liberal Democrat MP Stephen Gilbert, who is pressing for a meeting with Chancellor George Osborne to discuss the so-called ‘pasty tax’.
Truro-based Francis Clark partner and seasoned tax lobbyist John Endacott has also been asked to submit evidence to the Treasury Select Committee about the current rules on VAT and takeaway food as part of the debate.
John, who is also in discussions with a number of key tourism and food and drink groups in Cornwall, said: “This is a big issue for our clients but it’s not as straightforward as some might suggest. The existing VAT rules are inconsistent in how they are applied and the Chancellor’s proposed changes are not prompted by the sale of pasties but by some large fast food outlets looking to push the boundaries on VAT. But Cornwall has been caught in the cross-fire.
“I think it’s unlikely the Chancellor will back down on the principle but what we can do is work together to make sure that our response is co-ordinated and any changes are reasonable and don’t damage our economy in the South West. The measure is out for consultation and we need to work with H M Revenue & Customs and also H M Treasury to get to a decent outcome.
“The changes so far announced look unworkable and won’t remove the current confusion. We have to get them improved. We also need to understand what this means for jobs in Cornwall. We will only be able to do that with good evidence of the impact of the proposed measure and that’s the only thing the Treasury and HMRC will listen to. Our pasty summit is part of that process.”
Stephen Gilbert MP said: “I’ve raised this issue directly with the Chancellor because there are many businesses in my constituency and across Cornwall that are very concerned about the potential impact this could have. A 20% hike at point of sale not only hits people in the pocket but risks putting deflationary pressure on wholesale prices, and that will hit the bottom line in an industry that employs thousands of people in Cornwall. It’s a serious issue which is why we need to collect the evidence.”
The HMRC is consulting on the proposed VAT changes and the deadline for responses is 4th May this year.
Francis Clark has set up a dedicated email address for anyone interested in helping to lobby about the proposed VAT changes, or who has evidence they would like to put forward about the potential impact: pastytax@francisclark.co.uk
Ends
Download full press release