Chippies will lead the way in fight against VAT on takeaways

By
Pamela Owen

06:22 EST, 1 April 2012

|

09:57 EST, 1 April 2012

Just days after pastygate the government faces another backlash after fish and chip shop owners announced they will start a legal bid to claim back millions of pounds in VAT.

Takeaways across the country will take action against HM Revenue Customs (HMRC) to claim the tax should not be charged on take-away food.

A recent ruling by the European Court of Justice, which involved German hot dog seller Manfred Bog, spurred on the test case.

Chippies across the country are backing the legal move which could be a major problem for prime minister David Cameron

Chippies across the country are backing the legal move which could be a major problem for prime minister David Cameron

Mr Bog recently won a ruling at the court which said he did not have to charge the full rate of VAT.

The court ruled his sausages and chips from three mobile snack bars required so little preparation they did not constitute as catering.

It also found the same should apply to popcorn and nachos sold in German cinemas.

Now top accountancy firm KPMG has agreed to bring the case forward on behalf of the National Federation of Fish Friers.

One of its experts in the field, Peter Crush, has said way food is taxed in the UK is ‘unnecessarily complex’.

The fish-and-chip shop owners will argue they should be exempt from paying VAT because they do not provide a service but only supply food to be taken away.

Chancellor George Osborne closed the tax loophole for pasties

Chancellor George Osborne closed the tax loophole for pasties

President of the federation and owner of Our Plaice, a take-away in Hagley, told the Sunday Times: ‘The budget focused attention on pasties, but for many years fish-and-chip shops and other takeaways have had to pay full VAT on the hot food we sell,’ he said.

‘How can it be fair that a supermarket was able to sell hot chicken portions with no VAT but a fish and chip shop owner had to pay the full rate?’

The row over introducing the fee on pasties started after Chancellor George Osborne announced plans to ‘remove anomalies’ from the tax system, which currently sees VAT charged on hot food.

Greggs and other bakers have previously argued their products are kept warm from the oven rather than served hot, so avoided the 20 per cent tax.

But now the loophole has been closed and from October bakeries will no longer be allowed to dodge the duty.

The latest case being brought forward by fish-and-chip shops could cause huge problems for the government.

It could lead to future cases from takeaways who have been paying the VAT rate since 1984.

Each outlet, if successful, could reclaim tax for a previous four years, leading to millions of pounds in payouts.

However, HMRC has insisted the Bog judgement will have no implications for the UK.

Here’s what other readers have said. Why not add your thoughts,
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The comments below have been moderated in advance.

Osborne looks like one of those dashboard toys, you know, the one’s with the bobbing heads.

A madras curry served cold would still taste hot! So what will the greedy politicians do about that?

tomtom tom, sutton, 1/4/2012 15:32————— Sam only cooks for premier league donors. Those over 200 grand! And Dave washes up! or should that be cleans-up?

When VAT was applied to fish and chips that cost was immediately passed onto the customer. If there is to be a VAT rebate there should be a reduction to take that fact into account i.e. zero rebate!!!!!

Fish and chip shops don’t pay VAT, they merely collect it from their customers and pass it on to HMRC. It is their customers who should be claiming refunds.

Maybe Dave should have kept that sausage roll in his mouth that time, just to help him keep it shut….Could we claim the VAT back on all the Fish Chip takeaways we have eaten, all these past years.

I am expecting one of those phone calls ‘Have you been miss sold credit card protection, breast in-plants,had an accident or sold fish and chips Sir!

I THOUGHT WE WERE IN THE E.U.AS WELL AS GERMANY,WHATS GOOD ENOUGH FOR ONE E.U. COUNTRY SHOULD APPLY TO ALL.

I understood VAT was only paid if you eat in as opposed to take away!

So we are going to get VAT relief for our customers that cannot buy from a British Chip shop from Ashton-U-Lyne to Manchester, still there is one newsagent English-shop along all that long route and no English chippy en-route.

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