Subway fights VAT in court

 
Kasmira Jefford
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AY is set to take its battle over the chancellor’s controversial pasty tax to the High Court next month in what could lead to a further embarrassing blow to the Treasury’s efforts to clamp down on VAT loopholes.

More than 100 Subway franchisees are appealing against a court ruling in 2010 against the sandwich chain, which argued that its toasted subs should be exempt from VAT because they were heated in order to comply with food safety legislation.

The case will be heard at the Upper Tribunal for tax next month, just weeks after the Treasury revised its pasty tax proposal, deciding to exclude cooked products left to cool.