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Budget U-turns: Pasties, caravans and charities – what will and won’t be taxed

Chancellor George Osborne made a series of Budget U-turns regarding tax and VAT, following concerns raised by charities, businesses and the public. So what changes have been made?

Charitable donations

Tax avoidance featured heavily in March’s Budget, but proposals to introduce a cap on income tax relief for charitable donations met strong opposition from charities, fearing it would damage philanthropic giving. Plans to limit the amount a person can donate tax-free to £50,000 or 25 per cent of their income (whichever was higher) have now been dropped.

Hot food

The Government’s ‘pasty tax’ had originally planned to charge VAT at 20 per cent on all hot foods. However, the change means that foods such as pasties and baked goods which are sold cooling-down (as opposed to being kept in hot cabinets) will now not be charged.

Static caravans

Plans to charge 20 per cent VAT on static caravans, bringing them in line with mobile ones, have also been dropped. The implementation of a new five per cent VAT charge has also been delayed from October to April next year.