Subway has taken its fight to overturn the government’s decision to tax toasted sandwiches to Downing Street.
Representatives from the sandwich food-to-go firm delivered a petition containing more than 150,000 signatures to No 10 yesterday (22 January), in a bid to seek equal tax treatment for its toasted sandwich products.
Subway’s toasted subs, alongside similar toasted sandwiches, are currently subject to a 20% VAT, unlike products such as freshly-baked takeaway pies and pasties that are not kept hot after baking, which avoided similar taxing after the government performed a U-turn on the move last May.
Trevor Haynes, area development manager for Subway UK and Ireland, said: “It would appear that this application of VAT is being specifically targeted at Subway stores, which is concerning when franchisees work hard to maintain their business and the brand is the only quick-service restaurant to support all relevant key government health pledges.”
Subway said it welcomed the government’s move to “introduce greater clarity and a level playing field” for all hot foods, after the 2012 Budget was announced by George Osborne three months ago.
However, the firm argued that changes to the rules meant that as of 1 October 2012 a “cooling down” test was incorporated to address practical concerns with hot bakery products.
The company claimed: “Government legislation still fails to create a legal framework which applies only an objective test, which the Subway brand understands is required by European Law.”
The firm added that it believed that this was “a potential breach of the EU principles of equality of treatment and fiscal neutrality among retailers selling similar products that fulfil the same purpose”.
Among those representing the business on Downing Street was David Cameron, a Subway franchisee, who said: “My staff and I work very hard to offer our customers freshly made, low-calorie subs, which include one of your five-a-day vegetable portions from our salad bar, yet I am penalised because some of the items are toasted.
“It seems unfair that hot pasties can enjoy a tax break, while low-calorie sandwiches supplied by small businesses like mine are penalised.”