Tax loophole closed on takeaway baked goods

In his recent budget announcement, the chancellor, George Osborne, made the announcement that he is going to be closing the legal loophole which allows baked items that are being taken away to be exempt from sales tax.

Many people have described this has part of the ongoing class war that seems to be being fought in the country. The closing of this loophole means that the price of these products is likely to increase by around 20 percent, in line with the current sales tax rate.

Greggs, the bakery, is one of the businesses in the country that is going to be most affected by this sales tax and after the announcement of the budget stating that their products would be taxed, shares in the company fell by nearly 6 percent.

The Chief Executive of Greggs, Ken McMeikan, recently met with officials of the Treasury to plead with them in order to keep baked products exempt from tax. He commented about the issue, “Putting a sales tax on these goods is going to put a dent in the pockets of hard-working people.”

The decision to close this loophole has led the Conservative government to receive even more criticism about them being out of touch with ordinary people. This is a statement that has been echoed by the leader of the Labour Party, Ed Miliband, in a speech he made standing outside a Greggs outlet.

It is expected that the government are going to make an additional £100 million through the introduction of this tax every year. The government did highlight that this additional tax is going to only affect people who purchase certain items from the store. Currently, baked goods are not subject to the sales tax because they are not sold hot, once they are baked they are left to cool in unheated containers.