Subway sandwiches are loved by millions of people, many of whom enjoy one every day of the working week.
However, the reason they are so tasty is likely to be the huge quantity of sugar in the bread.
In fact, the bread contains so much sugar that an Irish Supreme Court ruling has stated that it doesn’t meet the legal definition of ‘bread’.
Instead it must be classed as a ‘confectionary’.
The ruling came after a Subway franchisee from Tuam, Co Galway claimed it was not liable to pay VAT on its takeaway products as bread qualifies for a zero-tax rate as it is a staple food.
The franchisee – Bookfinders Ltd – attempted to claim a refund on VAT paid at a 9.2% rate between 2004-05, saying the rate should have been 0%.
However, the court heard that the sugar content of Subway’s bread amounted to 10% of the weight of the flour in the dough.
This was considerably higher than the 2% figure required to remain within the statutory definition of bread in the Value-Added Tax Act 1972.
The act states that ingredients such as sugar, fat and bread improver must not weigh more that 2% than the weight of the flour.
Mr Justice Donal O’Donnell said it was clear that the intention of the act was to distinguish bread from other baked goods made from dough.
Bread was considered a staple food and therefore exempt from the 9.2% rate.
Subway items such as meat ball sandwich didn’t actually contain bread and therefore the 9.2% rate of tax had not been wrongly charged and should not be refunded.
The court ruled: “The argument depends on the acceptance of the prior contention that the Subway heated sandwich contains ‘bread’ as defined, and therefore can be said to be food for the purposes of the Second Schedule rather than confectionary.
“Since that argument has been rejected, this subsidiary argument must fail.”
Subway employs around approximately 24,000 across its stores in Ireland and the UK. In 2017, they signed a big money deal with Irish food supplier Dawn Farms worth around €850 million.
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Written by Michael Kehoe @michaelcalling