Some Subway customers received a nasty shock when they popped into the eatery to get their usual treat recently. It turns out the company is now adding VAT to any sandwich you want toasted or heated. If you order it as a regular, you won’t pay the extra.
Reports are also stating customers are being charged extra if they want to eat their sandwich in the Subway branch. So, taking away a cold sandwich appears to be the only way you can avoid the VAT being added.
According to information from staff, the price increase is down to government rules about when to charge VAT on food products. Hot food should have VAT added to it, whereas cold food shouldn’t. Moreover, eating in means that whatever you have will incur VAT, which can be avoided if you choose a takeaway instead. A spokesman said the price rise was “in accordance with the law”, which does seem to be the case.
The cost of VAT was originally included as part of the price to the customer. However, thanks to a menu restructure, this element is now shown separately. It does mean customers can instantly see what they would pay in addition to the basic price if they opt to get their sandwich toasted. If you choose to get a basic sandwich, taken away, without it being heated, you’ll pay less. However, lots of customers are unhappy at the move – especially as it looks as if many were caught on the hop when visiting to order their regular lunchtime treat.
It does make us wonder how many people will accept the change, and how many might switch to another sandwich to save some cash. Others might get their usual sandwich but forget about it being toasted. The spokesman for Subway did point out the company does not pocket the extra money. Instead, they pass it to HMRC as part of their regular VAT payment. So, they are merely following the VAT rules – even if it does annoy some of their customers.
This all stems from the so-called Pasty Tax that came up in 2012. However, Subway did also point out prices were set by the individual owner at each store. Therefore, they may well differ and some people might find the changes more noticeable than others.
This is one example, however, of the way VAT can directly affect the consumer. While the business must charge the appropriate amount of VAT, the customer rarely thinks about the amount they pay – unless it changes. Since this has been highlighted as a change made specifically to adhere to the VAT rules, it has been more newsworthy than other similar incidents.
Is your local Subway charging more now than it did before? If so, are you avoiding it by eating out and eating cold?