Subway plans to take its case to abolish VAT on its toasted sandwiches to Europe, British Baker can confirm.

It comes as a tribunal this month ruled against the move to exempt the food-to-go sandwich firm’s sub-style sandwiches and similar products sold by bakery retailers from the 20% tax.

Dipak Jotangia, partner at Dass Solicitors, who has been representing Subway for the case, told British Baker: "Subway is extremely disappointed. We are currently considering advice with a view to appealing the judgment. We believe the judge has failed to understand, among other things, the application of a fundamental principle of European law. Any appeal would be to the Court of Appeal and it may well be that the question(s) of fundamental European law may need to be referred to the Court of Justice of the European Union.

"Subway is determined to fight the unfairness that it and many other businesses are facing. One of the key issues at the heart of the case is the purpose test, which has led to the unequal treatment of such products. Subway is aware of the repercussions of this case, not only for itself but for many other firms in the food retail and bakery industry."

Subway launched its own Toast the Tax campaign against the move to add VAT on toasted sandwiches, which came into force on 1 October. The campaign included paper and e-petitions.