It's All Balls!

Courtesy of the Telegraph, an amusing battle between HMRC and Subway over the need to heat a Meatball Marinara “sub”:

"The Subway sandwich is set to be the subject of a High Court battle that could reignite the VAT pasty row that caused the Government such pain earlier this year. 

The case revolves around the heated Meatball Marinara “sub”, one of its most popular. 

If the tax authorities lose the case, it would be another blow to the Treasury and its attempt to close the VAT loopholes on food. 

The Subway sandwich is heated up before it is handed to customers, and in the eyes of the Treasury it is therefore “above ambient temperature” and liable for the full level of VAT at 20pc. 

A test case was bought by a franchisee based in Huddersfield in 2010, who claimed that all of its toasted subs were heated in order to comply with food safety legislation. 

 It argued that the heating process was needed to stop the Marinara sauce from being “thick and glutinous”. The franchisee’s legal team employed a professor of surface metrology (the measurement of heat and surface changes) to measure the temperature of the sandwiches and the “ambient” temperature of the shop. 

In 2010 a judge ruled in the tax authorities’ favour and Subway has been forced to carry on charging VAT on its toasted sandwiches. 

However, a group of more than 100 Subway franchisees is appealing the decision and the case will be heard at the Upper Tribunal for tax, in the High Court next month. 

Their solicitor, Dipak Jotangia, a partner at Diss Solicitors, said that the Government’s decision not to press ahead with the pasty tax gave them confidence they would win the appeal."

Tax does have to be taxing.






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The Unworkable Pasty Tax

Good luck to HMRC in trying to make George Osborne's pasty tax workable in the real world.

Ken McMeikan, Chief Executive of Greggs, writing in The Northerner said:

"Under the Chancellor's proposals, any food that is sold "above ambient air temperature" will become subject to VAT, whilst those products that are served "at or below ambient air temperature" will not be. This will mean that some savouries will become subject to VAT depending on how long after they are taken out of the oven they happen to be sold.

This will create enormous complications and confusion for our staff and our customers. We sell over 300m savouries a year, and we strongly believe that legislation that requires us to determine the temperature of the product before it is sold is unworkable."

Wee Georgie and his chums don't really have to worry about such matters, because they eat pasties that are subsidised by the taxpayer.

Tax does have to be taxing.

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TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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Bread

"Ironically" despite claims by the government that it wishes to "simplify" taxes, George Osborne's recent budget has rather muddied the waters and left HMRC and taxpayers scratching their heads over a number of matters eg 20% VAT on hot takeaway foods ("above the ambient air temperature at the time they are provided to the customer").

This has caused some confusion over what to do with bread, normally considered a basic food (and not subject to VAT), when it is served warm.

Therefore HMRC have launched a public consultation "VAT Addressing Borderline Anomalies", that seeks to discover a.o. the exact definition of bread.

- What is bread?

- Is a croissant bread?

The consultation document states:

"For a number of years, the borderline between hot takeaway food (standard-rated) and cold takeaway food (zero-rated) has been the subject of litigation, with some retailers arguing that the purpose of heating their food products is to improve their appearance or to comply with health and safety regulations, rather than to enable them to be consumed hot.

So, although many retailers and takeaway outlets charge VAT on the sale of hot chicken products, hot pies and toasted sandwiches, some retailers and bakery chains sell similar products zero-rated."

Greggs has already threatened to take legal action if HMRC tries to label its food as 'hot' and subject to VAT.

So much for simplification!

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
HMRC QROPS provider. Unlock your UK pension and access a 25% lump sum today.

Quote ID code "ABC" when contacting a QROPS specialist.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"