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Tax fight for battered chip shop owners

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Fish and chip shop owners who say they are being battered by VAT are taking their fight to Europe.

Industry chiefs fear hundreds of fryers up and down the country may have had their chips if a hard-fought battle to scrap the current 20% level of tax is unsuccessful.

There have already been two failed attempts in British courts to win a zero VAT rating for fish suppers. Now accountancy firm KPMG, which is helping chippie owners, is set to take the fight to the European courts.

Their pledge comes almost two years after Chancellor George Osborne ditched plans for 20% VAT on freshly baked pies and sausage rolls.

Andrew Crook, secretary of the National Federation of Fish Friers (NFFF), said: “We have a protective claim going through KPMG, which is purely for takeaways.

“They are trying to get VAT reduced to the lowest level.

“The claim has been in court twice and has been refused so far, so it is going to be put to Europe.”

The federation argues it should be exempt, in line with supermarkets, which do not pay VAT on some of the hot food they sell.

The campaign is being supported by last year’s national fish and chip awards winner Calum Richardson (pictured above) who owns The Bay Fish and Chip Shop in Stonehaven, Kincardineshire.

He is among hundreds of chippie owners who are also seeking to claim back VAT they have paid in the past.

At present, VAT makes up 99p of every £4.95 fish supper sold at Mr Crook’s two family-run chippies in Lancashire.

He and other owners claim they could slash the cost of their food if they didn’t have to payVAT.

He said: “Every quarter it is a struggle. The Government claim that we are collecting it and adding it on to our prices.

“But the reality is that we are absorbing it because customers will only pay so much for their fish and chips.

“I run two family businesses, but we’re under pressure just to make ends meet, rather than looking to the future.”

He fears that the Great British chippie could be consigned to the bin of history.

Mr Crook said the rising cost of haddock and a cut in cod fishing quotas was heaping even more pressure on already hard-pressed chip shop owners.

Currently, VAT is charged at the standard rate because fish and chips are sold for consumption whilst still hot.

Chancellor George Osborne was forced into an embarrassing U-turn in 2012 after attempting to make bakers pay the same 20% level of VAT, which became known as the pasty tax.

After the rethink, only goods heated for sale such as toasted sandwiches, became subject to the tax.

The industry has taken hope from the case of German hotdog seller Manfred Bog.

He had his VAT payments cut to 5% after the European Court of Justice ruled his sausages required so little preparation his business didn’t count as catering.

A spokesman for KPMG said: “We have assisted numbers of NFFF members in submitting protective claims for overpaid VAT pending ongoing litigation.”

A spokesman from HM Revenue & Customs said he could not comment while legal action was ongoing.