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January 2019

Why introduce a ‘Pudding Tax’ when we could reform VAT?

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It’s January 2nd and I am frustrated by today’s ‘Pudding Tax’ article in The Telegraph and the suggestion from Dr Alison Tedstone (Chief Nutritionalist at Public Health England) that further action to the Diabetes and Obesity ‘epidemic’ should include taxes.

I’ve already written to the Chancellor, via Keith Vaz and to Tim Farron, my local MP. I have spoken out at a public debate at Food Matters and I have already written one blog on the issue so today I decided to reply to the Editor of The Telegraph @LettersDesk with the following letter:

Sir,

I am writing in response to today’s ‘Pudding Tax’ article and the editorial comment on nanny taxes, both of which I believe are missing an important point.

We already have a food tax in this country – VAT. Established post-WW2 and subsequently tinkered with, this tax is now at odds with PHE’s remit for rescuing sugar consumption. Many foods containing high levels of refined sugars are zero rated because they are classed as essential. This includes cakes, biscuits and puddings. In contrast, healthier alternatives, such as ‘compressed fruit bars’ which are combined with nuts and seeds and therefore have numerous health benefits are rated at 20%.

At Food Matters Live, in November, Duncan Selbie, the Chief Executive of Public Health England spoke about the sugar tax and progress that was being made. I challenged him on the use of taxation, but was fobbed off.

In her column, Tanya Gold concludes suggesting that ‘Sugar. Sugar. Sugar … in its purer forms’ should be banned.. I would go beyond the chocolate bars and Easter eggs and challenge the government to penalise all sugar-filled snacks and cereals which are currently benefiting from zero rating and help to make the healthier option cheaper!

sugar

Through Keith Vaz (as chair of the Sugar Debate) and Tim Farron (my local MP) I wrote to the Chancellor asking for theVAT system to be reviewed. The response from the Rt Hon. Mel Stride sidelined the key issues and suggested that the government was limited by EU regulations in amending ‘the scope of various rates and exemptions’ and that those benefiting from the reliefs are ‘keen to retain them’. Of course they are – it makes their high-sugar products 20% cheaper!

Challenges to the existing system in the courts have focused on whether snack items are cakes or biscuits leading to quite frankly ridiculous statements in the VAT documentation and baffling declarations in court papers. In my blog published in response to last year’s Sugar Debate in Parliament I highlighted the fact that:

In 2014, the ‘Snowballs’ tribunal concluded that the chocolate covered marshmallows produced by two Scottish companies were classified as cakes because of ‘the ingredients, the cooking process and the shelf life’. Meanwhile, according to one ruling, flapjacks are cakes because the syrup forms an integral part of the binding process rather than being used as a sweetener; whilst in another it is because “at the inception of VAT, flapjacks were widely accepted as cakes”.

The taxation system in this country is already overly complex; rather than introducing new taxes common sense dictates that it would be better to overhaul outmoded VAT on food (and women’s sanitary products!)

Perhaps though that is the sticking point – I am appealing to common sense!