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VAT free hot sandwiches are toast

Last week, a franchisee of sandwich retailer Subway lost its case that toasted sandwiches should be VAT free.

Sub One had argued that toasted sandwiches shouldn’t be classed as hot takeaway food subject to 20% VAT, but instead should be classed as VAT-free as the only reason they were ‘hot’ was as part of the cooking process.

But the Court of Appeal disagreed, ruling out an appeal to the European Court of Justice.

The case also questioned the VAT liability of the franchise’s ‘Meatball Marinara’ sandwiches, and, as these were also deemed as subject to VAT, the decision will no doubt be a blow to the food chain which has parted with a significant amount of money as a result of sponsorship of the World Cup.

From footballs, student balls to meatballs, getting VAT wrong could certainly end in a – er – ‘mess’ up.

David Wilson is VAT Associate Director at Baker Tilly.

This was posted in Bdaily's Members' News section by Baker Tilly .