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Sub One Ltd (t/a Subway) v HMRC

In Sub One Ltd (t/a Subway) v HMRC (Upper Tribunal – 5 October) a company sold toasted sandwiches and ‘meatball marinara’. HMRC issued a ruling that the sales were standard-rated. The company appealed. The First-tier Tribunal dismissed the appeal finding that the sandwiches and marinara had been heated ‘for the purposes of enabling them to be consumed at a temperature above the ambient air temperature’. The Upper Tribunal upheld this decision. Arnold J specifically declined to follow dicta of Parker LJ in C&E Commrs v John Pimblett & Sons [1988] STC 358 observing that counsel for both parties accepted that they were inconsistent with European law which required an objective test rather than a subjective test. He also held that although previous tribunals had reached inconsistent decisions concerning similar products there had been no breach of the principle of fiscal neutrality.

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