In a First Tier Tribunal case, Peppermint Foods appealed against an assessment of £144,383 related to VAT charges.

Peppermint Foods owned a Subway franchise with two outlets in Lakeside shopping centre and retail park in Essex between 2018 and 2021. Run by Mohammed Ajmal, the two shops employed an average of 25 staff.

HMRC issued an assessment for underpaid VAT for the period 05/15 to 02/19, representing a four-year discrepancy over VAT on sales.

Following an investigation, HMRC argued that the appellant’s staff had incorrectly rung hot takeaway food into the till as cold takeaway food.

Hot and cold food which is eaten in an outlet is standard rated for VAT purposes, as is hot takeaway food. Cold takeaway food other than confectionery is zero rated.