Build-A-Bear UK Holdings limited v Revenue & Customs (CUSTOMS DUTY - classification 'accessories') [2019] UKFTT 707 (TC) (27 November 2019)

Build-A-Bear UK Holdings limited v Revenue & Customs (CUSTOMS DUTY - classification 'accessories') [2019] UKFTT 707 (TC) (27 November 2019)

The Tribunal held that while some items (such as general clothing and accessories without specific features for stuffed animals) are properly classified as 'accessories' for toys/dolls under CN headings attracting 0% duty, other items with features specifically for stuffed animals (e.g., slits for tails/ears) are not so classifiable and fall under headings attracting 4.7% duty. The appeal was allowed in part, with directions for reclassification and recalculation of duties accordingly.

Citation
[2019] UKFTT 707
Parties
Appellant: Build-A-Bear UK Holdings Workshop Limited; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
27 November 2019
Procedural Posture
Customs Duty Appeal / First Tier Tribunal (tax) Decision
Outcome
Appeal allowed in part
Legal Topics
Customs Classification, Import VAT, Combined Nomenclature, Toy Accessories, Tariff Codes, Duty Repayment
Tax Law Customs Law European Union Law Customs Classification Import VAT Combined Nomenclature Toy Accessories Tariff Codes +1 more

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Parties

Build-A-Bear UK Holdings Workshop Limited

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Customs Duty Appeal / First Tier Tribunal (tax) Decision

Legal Issues

  1. 1 What is the correct customs classification under the Combined Nomenclature for various 'accessories' imported by Build-A-Bear for use with toys and dolls?
  2. 2 Are the disputed items properly classified as 'accessories' for toys/dolls or under other headings attracting higher duty?
  3. 3 Is HMRC's refusal to repay customs duties and import VAT lawful?

Ratio Decidendi

The Tribunal held that while some items (such as general clothing and accessories without specific features for stuffed animals) are properly classified as 'accessories' for toys/dolls under CN headings attracting 0% duty, other items with features specifically for stuffed animals (e.g., slits for tails/ears) are not so classifiable and fall under headings attracting 4.7% duty. The appeal was allowed in part, with directions for reclassification and recalculation of duties accordingly.

Court Disposition

Appeal allowed in part

Orders

  • Some items to be reclassified as 'accessories' for toys/dolls under CN headings attracting 0% duty; others to remain under headings attracting 4.7% duty as determined by their specific features.
  • HMRC to recalculate customs duties and import VAT in accordance with the Tribunal's findings.