The Government has withdrawn plans to impose VAT on Cornish pasties and reduced its proposed tax on static caravans to 5 per cent.
The Government has changed the definition of what is a “hot” pasty. As a result, pasties and sausage rolls will be defined as cooling down rather than being kept hot and will not be liable for VAT.
Static caravans, which do not currently incur VAT, will now be liable for a rate of 5 per cent but this will be delayed from October to April next year.
A parliamentary debate last week saw MPs from all three parties criticise Chancellor George Osborne’s plans as unenforceable.
A Treasury source told the BBC: “After extensive engagement we have improved the policy, addressing practical concerns, ensuring that the new regime could be as simple as possible to apply.”