Subway looks set to take the VAT fight over its toasted sandwiches to the Court of Appeal, it has been reported.
The sandwich retailer has been campaigning against the decision by the government, last year, to impose 20% tax on ‘hot food’, as it believes its toasted sub-style sandwiches do not fall under this criteria.
In October 2012, British Baker reported that a tribunal had ruled against the move to exempt the food-to-go sandwich firm’s ‘toasted’ sandwiches and similar products sold by bakery retailers from the 20% tax.
It is now believed that Subway has won the right to appeal that decision.
Last year, Dipak Jotangia, partner at Dass Solicitors, who has been representing Subway for the case, told British Baker: “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 baking industry.”
It is thought that up to £1 billion in tax revenues could be at stake, if Subway is successful with its appeal.