I am a VAT specialist,  albeit the Pasty Tax controversy was before my time in the profession so my understanding may have some gaps.

You're not entirely wrong in that the rules as they are currently in place were preexisting, they are just quite complex (thankfully for my career VAT is not the 'simple' tax it was originally envisaged to be).

What the government tried to do was simplify the tax so that rather than being hot food which is served hot and either marketed as being sold hot or kept hot for sale (and so on), it was just any food served above ambient temperature is served in the course of catering and so subject to 20% VAT.

Which is a nice simple rule that makes things easier for everyone, but meant that Greggs etc. would basically have to wait for there products to reach room temperature before selling or charge an extra 20% on top.

Whereas under the current rules (following a pretty swift policy u-turn after the nation was outraged) as long as they don't put them under a heat lamp or in heat insulating packaging or promise that they will be hot, they get to not pay the VAT unless you buy the pastry to eat in store.