Laurence Supply Co (Leather Goods) Limited v The Commissioners for HM Revenue and Customs [2025] UKUT 00031 (TCC)
Upper Tribunal Tax and Chancery decision of Judge Raghavan on 24 January 2025
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1. The applicant “Laurence Supply”, applies to the Upper Tribunal (Tax and Chancery) (“UT”) for permission to appeal against the decision of the First-tier Tribunal (“FTT”) released on 6 February 2024 (“the FTT Decision”) following a hearing which took place over the dates 12-14 September 2022 and 6 June 2023 and published as Laurence Supply Co (Leather Goods) Limited v HMRC [2024] UKFTT 124 (TC). 2. Laurence Supply renewed its application for permission to the UT. I had previously refused permission to appeal in my decision of 5 September 2024. This is my decision following the oral renewal of the application heard on 14 January 2025. Laurence Supply was represented by counsel, Timothy Brown (who had not appeared below in the FTT, the company having represented itself at the hearing there through its director Mr Laurence Gordon and with another direction Mr Mark Gordon also attending). HMRC were represented at the oral renewal of permission hearing by counsel, Joanna Vicary who had appeared for HMRC below. I was grateful for both Mr Brown’s and Ms Vicary’s submissions. 3. The FTT Decision concerned Laurence Supply’s appeal against a C18 Post Clearance Demand Note (“C18”) related to imports by Laurence Supply of handbags and purses from China including £603,548.58 customs duty. The extent to which that was correct turned in summary on whether the relevant customs classification was the one which applied to handbags and purses with an outer material predominantly of “plastic sheeting” (with a duty rate of 9.7%), as HMRC argued, or the classification in respect of “textile materials” or “other” (with a duty rate of 3.7%), as Laurence Supply argued. In accordance with a relevant Explanatory Note the question was whether [63] “the resultant outer layer being visible to the naked eye has the same visual appearance as an applied layer of manufactured plastic sheeting”. As regards “Item C” being one sort of handbag the FTT examined, the FTT considered the leatherette on that did not meet that description and that HMRC had misclassified it under the code for “plastic sheeting” (reducing the C18 by £2,064.36). The FTT thus allowed the appeal in part, but was not satisfied Laurence Supply had met the burden on it to show the classifications in respect of the remainder of the goods covered by the C18 were wrong.