Let them eat rum babas The system for charging VAT on food makes no sense. And it encourages unhealthy eating
Peter Preston The Guardian, Monday 30 March 2009
The logic, of course, is impeccable. After alcohol taxes, designed to make you booze less, and tobacco taxes, designed to stop you smoking altogether, come "obesity taxes" - designed to make Jamie Oliver very happy. New York's revenue-hungry governor has just tried to get his own version - an 18% impost on Coke, Pepsi and similar sodas - passed into law. One feisty Glasgow doctor caused a bit of a stir the other day by saying that chocoholics needed squeezing until their waistlines shrank. Charge more for what makes you and your kids unhealthy? It goes absolutely with New Labour's grain. Meanwhile, join me on a little voyage around the taxes we already have - VAT on food.
It's difficult, turning over 17 pages of officialdom's finest detail, to fight back a grin. "Starch is zero-rated: but this does not apply to starch for stiffening shirt collars"; "Exotic meat - horse, ostrich, crocodile, kangaroo etc - zero-rated; but Live Horses, not a recognised food species, see Notice 701/15". It's also quite possible to see some general reasons behind HM Revenue and Customs' rhymes. Snacks - whether crisps, nuts, ice creams or sweets - are mostly out of luck, and carrying an extra 15% until 1 January 2010, when 17.5% returns. But then, in a potty, piecemeal way, everything goes to podge.
Take cakes and biscuits, for instance. If they're "wholly or partly covered in chocolate or some product similar in taste or appearance", then they're 15%. But millionaire's shortcake, with a shortcake base, a layer of caramel and usually one of chocolate, too? That's zero. Fruitcakes, meringues, flapjack, marshmallows, teacakes? Zero again. Florentines? Full wack. Chocolate chip biscuits? Plus 15% (like "gingerbread men decorated with chocolate unless this amounts to no more than a couple of dots for the eyes"). But bourbon biscuits stuffed with chocolate, and Jaffa cakes, waddle home free - just like rum babas.
Baked Alaska is a zero, but ice lollies are standard rate. Cream cakes are zero, ice cream cake is not. Frozen yoghurt that's completely frozen comes without tax, but a little thaw and you're in 15% territory. Popcorn attracts VAT, toffee apples are exempt. And there's absolutely no trace of calorie counting here. A chocolate mousse is zero, a lemon sorbet is 15%. A chocolate milkshake or raspberry smoothie has no tax attached, but "mineral, table or spa waters held out for sale as beverages" (as opposed to filling swimming pools, one supposes) attract the standard frown.
And if you want to cut down on your drinking by turning to alcohol- free beer or wine, forget it: the VAT inspectors remain implacable - or maybe simply too busy discussing the difference between prawn crackers made with tapioca (zero) and prawn crackers made with some cereal (standard).
So much argument in the years up to 1994, when the last big VAT act was passed, so many tribunals, inquiries, sensitive judgments ("unfermented grape juice for use in the Jewish seder or kaddish is zero-rated provided it is marked prominently in English 'for sacramental use only'"). But 15 years ago St Jamie was only a callow teenager putting his beans on toast, and the nutritional world was a different place. So there is scant trace among these infinitely fine lines of problems such as fats, salt, sugar and vitamins, which today send school chefs into paroxysms of anxiety. Nor is there evident acknowledgment of current concern or debate.
Worried about sandwiches that provide half your daily calorie needs at a single, snatched desk lunch? They are a zero ("unless part of a party or buffet service"). Perturbed about those ubiquitous "chilled or frozen ready meals" on a supermarket shelf? Those are a zero too. Our residual tax regime, in short, actually encourages mum to buy cream gateaus, big breakfast sarnies and frozen chips when she does her Tesco rounds.
We may talk about stealth taxes at the checkout, but we sure as egg custards don't talk health taxes, because the regime we have seems blissfully oblivious - stuck in that dusty arena where it's more important to count the chocolate biscuits in a tin of petit fours (not more than 15% of total net weight for a zero, please) than ponder what we're stuffing down our throats. Naturally, a total rethink won't be popular. New York has scrapped its obesity tax and bumped up income taxes instead. But surely, as they head back to 17.5%, even Darling and his VAT squad want us to keep paying up and living longer at the thin end of the sin tax wedge? Fat chance.