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  Finance Bill - New Clause 5 - VAT on Hot Baked Goods - (Pasty Tax)
  
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  @ MP voted aye against introducing VAT on hot baked goods, such as pasties even if they were not specifically kept hot for consumption. 
  @ MP voted no to introduce VAT on hot baked goods, such as pasties even if they were not specifically kept hot for consumption. 
  
  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 [http://en.wikipedia.org/wiki/Pasty_tax 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 hairdressersâ 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 
  adding:
  *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 [http://www.legislation.gov.uk/ukpga/1994/23/section/30 30(4)] or [http://www.legislation.gov.uk/ukpga/1994/23/section/31 31(2)] of the [http://www.legislation.gov.uk/ukpga/1994/23/contents Value Added Tax Act 1994] which shall affect baked products when no attempt is made to keep the product hot for consumption.â
  
  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 [http://www.legislation.gov.uk/ukpga/2012/14/schedule/26/paragraph/2 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. 
  
  
  * [1] [http://www.theyworkforyou.com/debates/?id=2012-03-21b.793.0#g799.2 George Osborne MP, (Tatton, Conservative), House of Commons, 21 March 2012] 
  * [2] [http://webarchive.nationalarchives.gov.uk/20130129110402/http://cdn.hm-treasury.gov.uk/budget2012_complete.pdf Budget 2012 - The Budget Document]
  * [3] [http://www.hmrc.gov.uk/budget2012/vat-con-4801.pdf Consultation on proposed VAT changes prior to the March 2012 budget]
  * [4] [http://www.legislation.gov.uk/ukpga/2012/14/schedule/26/paragraph/2 Schedule 26 paragraph 2 part 4 of the Finance Act 2012 Schedule 26 paragraph 2 of the Finance Act 2012]
  * [5] [http://services.parliament.uk/bills/2010-12/financeno4.html Parliament's webpage on the Finance Bill 2012 (Now the Finance Act 2012)]
  
  
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  (put thoughts and notes for other researchers here)
  