The High Court has answered all six questions in a VAT case stated against Bookfinders Limited, a Subway franchisee that argued heated sandwiches and hot tea and coffee should have been zero-rated. The court concluded that the supplies were subject to VAT at 13.5% under the rules applicable to the periods in dispute.
The case arose from Bookfinders’ repayment claims for January/February 2004 to November/December 2005. The company had revised its composite VAT calculation in 2006, believing the heated food and drinks qualified for the zero rate. Revenue refused the claims, and Appeal Commissioner Ronan F. Kelly ruled for Revenue after hearings in 2009 and 2010. The commissioner then stated six questions for the High Court’s opinion under section 941 of the Taxes Consolidation Act 1997.
Bookfinders operated a food outlet on Tuam Road in Galway, selling heated sandwiches and hot tea and coffee for takeaway and consumption on the premises. The commissioner found that 70% to 80% of the business was takeaway, but that the premises had limited facilities for customers to eat and drink. The High Court held that the reduced rate applied to supplies through a business providing such facilities; it was not necessary for each customer to use them.
The court also rejected Bookfinders’ arguments about the statutory wording “food and drink,” the treatment of hot tea and coffee, and the definition of bread eligible for zero-rating. The commissioner had found that the white and brown breads used in the sandwiches exceeded the statutory sugar limit. The High Court agreed with the interpretation that exceeding the limit for any listed ingredient meant the product did not qualify as defined bread. It also agreed that a heated sandwich was not the same thing as bread and was not excluded from the reduced rate on that basis.
Bookfinders further argued that applying different rates to hot and cold food breached EU principles of fiscal neutrality and legal certainty. The court said there was no factual finding that the products were similar from the consumer’s perspective or that the temperature distinction was arbitrary or impractical. It therefore found no basis to disturb the commissioner’s conclusions on those arguments.
In a judgment delivered on 14 October 2016, Mr Justice Keane answered “yes” to all six questions. The High Court gave its opinion on the questions referred in the case stated; the source does not describe a separate order for payment or repayment.