Pie tax is last straw (From The Wiltshire Gazette and Herald)

Pie tax is last straw

1:00pm Thursday 12th April 2012 in News

Small independent bakers like Marshalls in Pewsey, which has been run by the same family for four generations, say they will lose more than just dough if they have to charge VAT on hot foods.

Dubbed the ‘pie tax’, it could lead to some bakers closing, according to Richard Marshall, who took over the firm 14 years ago.

Many village bakeries like Marshalls, which has shops in Pewsey and Royal Wootton Bassett, sell hot pasties, pies and sausage rolls.

Some traders, like builders, depend on the local bakers for their hot snacks, but soon the shops could be forced to either stop selling hot food or charge VAT on it.

Mr Marshall, who took over the business from his father John, said that on top of other increasing costs, bakeries face the 20 per cent VAT that Chancellor George Osborne proposed in his budget last month.

He warned it could lead to even more bakeries closing.

Mr Marshall, a member of the National Association of Master Bakers, said the proposed VAT – which is out for consultation – would accelerate the rate at which bakeries are already closing.

He said rising costs could not be absorbed by small bakeries, unlike supermarkets which, he said, “are so big they can put a penny on here or a penny on there, where we can’t”.

“There are a lot of bakeries going under anyway because of rising commodity prices,” said Mr Marshall.

The cost of eggs, flour, sugar, as well as fuel for delivery vehicles, have all gone up.

“We are being squeezed all the time,” said Mr Marshall, who employs 19 staff across his two shops, including three bakers.

Mr Marshall said it had not been made clear at what temperature VAT would have to be charged, whether it would apply to fresh bread hot from the oven, or who would monitor it.

He has raised his concerns with Devizes MP Claire Perry and has petitions for customers to sign in his shops. There is also a national online petition.

The Master Bakers association has described the proposal as “an unpalatable tax” and urged bakery customers to sign petitions or write letters of protest to the chancellor and local MPs before the consultation ends of May 4. The tax could become law in October.