Dear Listener

I made two mistakes in my newsletter last week. First it is Pashley Cycles – without an -s- or an apostrophe. Secondly, part of its manufacturing process is brazing the frames of the bikes not braising them. Although they do live and breathe bicycles they generally do not eat them – braised, boiled, or roasted.

This was the week when pasties came up behind and bit the coalition on the bottom. Or more specifically the pasty tax. Or more accurately the takeaway-food-hot-from-the-oven-which-has-not-cooled-down-yet-and-is-not-bread tax. Charging 20 per cent VAT on this food will end an anomaly - and make the Government a hundred million pounds a year. At the moment takeaway food heated up to eat hot - perhaps a toasted sandwich or chicken and chips - is VATable at the full rate. Whereas a sausage roll, pie, or - yes - a pasty cooked fresh from raw which just happens to be hot when bought is not VATable - technically it is zero-rated so VAT at 0 per cent is added. In future it will be VATable at the standard rate of 20 per cent.

But that will create its own anomaly spelled out very well for me by Scott Wright whose family runs Bloomers Original Bakewell Puddings in, of course, Bakewell. They cook fresh food from fresh ingredients. So at 9am people buy family sized Bakewell tarts hot from the oven. As the morning passes the tarts will cool down and around lunchtime they are put in the chiller to keep them fresh. None of them attracts VAT.

But from 1 October while they are hot they will have VAT added as takeaway hot food. Once they have cooled to the same temperature as the shop the VAT will no longer be charged as they will be sold - in the official phrase - at or below ambient temperature. The same goes for pasties, apple pies, sausage rolls and other oven fresh products. When the shop is busy they do a second bake. And again hot from the oven they will have to have VAT added. Until they cool down for the teatime trade. Scott asks if they will have to label food with two prices – one for a hot and one for ambient temperature or below.

Many people tweeted me when I did this story on Breakfast to say there were more important things than a pasty tax. Which is true. But let me mention two more common purchases where VAT will now be added. Self-storage units will have to charge full rate VAT to their rents from 1 October. At the moment about two thirds do not on the grounds that they rent land, which is VAT free, not storage. And if you have not heard of Low Value Consignment Relief you will when the postie knocks at your door from 1 April and delivers a DVD or CD or memory stick or cosmetics or inkjet cartridge which you have bought cheap on the internet. At the moment if it costs less than £15 it is free of VAT as the Channel Islands do not have VAT and on goods below 15 pounds VAT is not charged at the border. But that concession ends for the Channel Islands on 1 April. So before leaving the parcel the postie will have to paid the VAT of up to 3 pounds plus an 8 pound Royal Mail handling charge. So cheap go  ods will not look so cheap any more. Expect riots.

***IN MONEY BOX THIS WEEK***

Up to a quarter of a million people have signed up to the Which Big Switch. And the consumer organisation will be running its reverse auction soon to try to get the big suppliers to bid for this chunk of business. We find out how it is going and talk to the smaller rival thepeoplespower as well.

Stamps are to rise by a record amount on 30 April and Royal Mail now has the freedom to raise prices further. Buy first and second class now before they go up. And we will find out how we compare with Europe.

We are returning to the vexed question of whether car insurers will refuse to pay up on your policy if you have had a drink but are under the legal limit to drive. More insurers explain their confusing policy terms.

We hear from an expert in tax credits that letters from HMRC saying individuals may no longer be eligible are misleading at best and inaccurate at worst.

And is Halifax, part of Lloyds bank, about to climb down after it reneged on its lifetime pet insurance. The Ombudsman gives his view of what should happen.

To be honest we may not squeeze all five items into our 24 minutes slot. You can hear what we manage by listening live at midday on Saturday, repeated Sunday 9pm, or anytime online at www.bbc.co.uk/podcasts/series/moneybox. Remember you can put in a regular order for our podcast. It is free.

There is more information on our website www.bbc.co.uk/moneybox where you can also download transcripts of past programmes and send us ideas or problems you want us to look into.

This newsletter is available at bbc.co.uk/moneybox/newsletter around the time it hits your inbox - tell your friends who do not subscribe. And you could join more than 28,700 people who now follow me on Twitter to enjoy - or rant about - my random but timely thoughts on money and a few other things whenever I am awake at www.twitter.com/paullewismoney.

Vincent Duggleby is here on Wednesday with Money Box Live at 3pm taking questions on small businesses.

Best wishes,

Paul

PS. I will be on Breakfast on BBC One on Saturday talking about one of the items in our programme. And back on Breakfast later in the week, probably on Thursday and usually around 0640 and 0820 talking about a money story and answering emails and tweets. But the time, and occasionally the day, can vary.

e-mail Paul Lewis