Sub One Limited (t/a Subway) v Commissioners for Her Majesty's Revenue and Customs
Decision date: 14 October 2010
Neutral citation: [2010] UKFTT 487 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned whether toasted Subway sandwiches ("toasted Subs") and meatball marinara sold by the appellant were "hot food" under note 3(b) group 1 schedule 8 VATA 1994 and therefore subject to standard-rate VAT. The Tribunal found both products were heated, had substantial parts above ambient when provided, and that the supplier's dominant purpose was to enable consumption above ambient temperature. The appeal was dismissed and the decision was directed to operate as a lead decision for related franchisee appeals.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The tribunal applied the twofold statutory test in note 3(b): (i) the goods must be heated for the purpose of enabling them to be consumed above ambient temperature (the supplier's dominant purpose, assessed subjectively but tested against objective circumstances), and (ii) at the time of provision any substantial part of the item must be above the surrounding ambient air temperature; any part above ambient suffices to bring the item within note 3(b).
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment expressed that a supplier's honest belief about what counts as "hot" is of limited or no relevance if inconsistent with objective facts, and that importing an "honest and reasonable belief" defence would improperly add words to the statute. It also indicated that a lead decision can be directed for multiple franchisee appeals even where the key issue involves the supplier's subjective purpose, if the evidence and legal issues are common.