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U.K. Taxes Subway Sandwiches if They’re Toasted

October 15, 2012

The controversy over the United Kingdom’s quickly shelved proposal for a “pasty tax” on freshly baked take-out foods is threatening to be reignited now that a judge has ruled there should be a value-added tax imposed on toasted subs and meatball marinara sandwiches from the fast food chain Subway.

A judge ruled against a Subway franchisee who claimed that such a tax was driving her out of business. Subway has argued that the tax is being inconsistently applied since toasted bagels and baguettes are not subject to the VAT under previous tax cases that came before the U.K. tribunals.

Earlier this year, the U.K. government had threatened to subject the so-called “pasty” to a tax, but backed down after a public uproar and protest from a popular bakery chain (see England Up in Arms over ‘Pasty Tax’). Now Subway is trying to organize a similar protest and has gathered over 130,000 signatures on its "toast the tax" petition, according to the Financial Times.

The main surprise here is that the fast food chain is called Subway in the U.K. Shouldn’t it be called the Underground?

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