Subway franchisees head for sandwich tax showdown

After announcing a U-turn on the so-called ‘pasty tax’ following a campaign by Greggs and others, several operators accused the government of inconsistency and double standards on tax legislation. As Peach Report has reported, a group of Subway franchisees then launched a ‘toast tax’ campaign to highlight the absurdity of VAT rules on sandwiches in particular.

Now the Sunday Telegraph reports that the Subway challenge will soon reach the High Court—with its meatball marinara sub the focal point for the case. The sub is heated before serving, and therefore liable to the full 20% VAT. In 2010, a test court case argued that heating the sub was essential to comply with food safety legislation—but judges ruled against the Subway franchisee who brought the case.

The appeal against that judgment by a consortium of around 100 franchisees is now preparing for a tribunal hearing at the High Court next month. 

The Sunday Telegraph says the government’s U-turn on the pasty tax has given the group confidence that they will win the appeal. If so, it will mean more changes in the ongoing VAT saga, and add more weight to the argument that high street food operators need much more clarity and even-handedness on legislation. “If the tax authorities lose the case, it would be another blow to the Treasury and its attempt to close the VAT loopholes on food,” says the paper.

For the full story, see Subway ‘meatball’ sub at centre of new VAT row.