The Supreme Court has refused permission for a Subway franchisee to appeal the Court of Appeal's decision to reject a plea concerning a previous Upper Tier Tribunal decision that heated food products should be charged VAT.
In the case of Sub One Ltd the UTT upheld HMRC's view that two hot food products should be standard, rather than zero-rated for VAT purposes.
Nearly 1,200 Subway outlets were waiting to bring appeals against HMRC should the challenge have succeeded, according to the judgement.
The franchisee then recently brought the case to the Court of Appeal, and argued against the rulings, saying that the differing VAT treatment of food products at Subway compared to that of other vendors breached EU fiscal neutrality principles.
However it lost this case and the appeal was dismissed.
The Supreme Court said the legal issue in the case "is whether the relevant tax legislation was compatible with EU law, and in particular whether it complies with the principle that legislation imposing VAT should be objective in character and legally certain.
"If the legislation is found to be EU law compliant, the issue is whether the approach previously taken the UK courts and tribunals represents an "entrenched attitude" to the legislation and whether the fact that competitors of the appellant received a benefit from an earlier misapplication of the legislation amounted to a windfall arising from an "unlawful act", with the consequence that the appellant was not entitled to be treated in the same way."
The Supreme Court order reads: "The Court ordered that permission to appeal be refused because the application does not raise an arguable point of law. In relation to the point of European Union law said to be raised by or in response to the application it is not necessary to request the Court of Justice to give any ruling, because the Court's existing jurisprudence already provides a sufficient answer."
Therefore the Court of Appeal's judgement still stands.