Sandwich franchise Subway has confirmed it is taking its appeal against VAT on its toasted products to the Court of Appeal.
The appeal, which is expected to go ahead before October, will determine the fate of millions of pounds worth of VAT assessments.
In July, a Yorkshire franchise of the popular food outlet, Sub One Ltd, lost its Upper Tier Tribunal appeal against HMRC’s decision to assess VAT on its toasted products.
Subway has historically had to pay VAT (currently at 20%) on its toasted food products, while some competitors who supply similar products have paid no VAT.
HMRC is expected to challenge the appeal, but refused to comment further.
A Revenue spokesperson said: “HMRC understands that Subway has been given leave to appeal. However, we cannot make any further comments while litigation is ongoing.”