Petrol, Postage and Pasties: (3) Pasties
The third item of news from this week concerns the way that hot take-away snacks are taxed. After the UK government Budget last week, in a short time a hot Cornish pasty or similar hot take-away will be charged VAT at 20%. But the same pasty at room temperature will not be subject to VAT at all. The story and video are here. Newspapers and the media have nicknamed this the "Pasty Tax"
The UK Government has a large team of OR analysts, and generally there are models to predict the effect of changes in taxation. So it is likely that someone considered the financial consequence of changing the collection of VAT on take-away food. But, given the instant reaction in the media, it should have been fairly obvious that this change would lead to confusion among retailers, and among the public buying hot food. The comments from "the man on the street" and those in the snack food business could have been foreseen. They come under the heading of elementary psychology.
Once upon a time, Operational Research was regarded as an interdisciplinary subject. Models about public finance would have been developed by economists, mathematicians and psychologists together. It looks as if there wasn't enough input from the last discipline. Even if there was nobody around with an academic background in psychology, training in O.R. ought to have included aspects of it.
The UK Government has a large team of OR analysts, and generally there are models to predict the effect of changes in taxation. So it is likely that someone considered the financial consequence of changing the collection of VAT on take-away food. But, given the instant reaction in the media, it should have been fairly obvious that this change would lead to confusion among retailers, and among the public buying hot food. The comments from "the man on the street" and those in the snack food business could have been foreseen. They come under the heading of elementary psychology.
Once upon a time, Operational Research was regarded as an interdisciplinary subject. Models about public finance would have been developed by economists, mathematicians and psychologists together. It looks as if there wasn't enough input from the last discipline. Even if there was nobody around with an academic background in psychology, training in O.R. ought to have included aspects of it.
At coffee shops I patronize on this side of the pond, it's common to place a microwave oven where buyers can use it to (re)heat purchases. Seems an easy way to avoid the Pasty Tax on your side -- sell the pasty cold and let the buyer heat it. (Here we would just dump the pasties in Boston Harbor and incite a rebellion.)
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