The humble sarnie could be a money-saver for UK firms.
It follows a Court of Appeal ruling sandwiches and cold take-away foods bought from outlets operated by Compass Contract Catering in BBC Television Centre should be zero rated.
Birmingham chartered accountants Clement Keys say the decision could have a far r eaching impact, with employers taking steps to recover tens of millions of pounds of tax on employees' sandwiches and claims could go back three years.
Compass won on two counts. The Court of Appeal ruled, even where access to a particular building is restricted to employees and guests, the sale of sandwiches can still be treated as the provision of cold food and is therefore zero rated for VAT purposes. This was despite the fact Compass has a contract with the BBC to provide catering services for staff and visitors.
The other point of debate centred on the type of facility constituting catering premises. The Court of Appeal judges unanimously agreed the premises for the purpose of "taking away" food was the retail outlet occupied by Compass, rather than BBC Television Centre, because Compass did not have any control over this building.
"The implications are wide ranging and could enable the sales of cold take-away food to be zero rated for VAT purposes when supplied from retail outlets located in office blocks, factory premises and sports venues," said Steven Simmonds, director of VAT services. "While the ruling is good news for businesses and could help drive down costs, it could prove to be a major headache for catering firms."
Historically, H M Revenue & Customs has classed sports venues as catering premises with food sales standard rated, but Mr Simmonds says this ruling could impact on a host of events staged at sports arenas, football grounds and similar facilities.