[2025] UKUT 00031 (TCC)

The application explains the case was about an appeal against the assessment in its totality. It argues that it must have been Laurence Supply’s case that the goods were all made of the same material, or there would be no sense in bringing the appeal: the FTT confirmed this point was made in closing; it was also made in Laurence Supply’s skeleton argument. The application also mentions that the fact that Laurence Supply was a litigant in person should also have been taken into account together with the entirety of Professor Bush’s report in respect of the “absent” samples he examined. It is argued that the fact that all the samples he examined fell within the lower duty rate would have been more persuasive in a decision about the quantum of the assessment.

In his oral submissions Mr Brown also argued the FTT had effectively misdirected itself by restricting itself to the question it posed at [82] and [87 ] that the appellant:

“had not established that all the Goods looked like either Item C or Item D”. Indeed, Laurence Supply (acting clearly honestly and fairly) did not go so far as to suggest that this was the case”.

The FTT ought, Mr Brown argues, to have turned its mind to the true question underlying the appeal (irrespective of how Laurence Supply – who were not legally represented at the hearing- had argued its case). That was whether Laurence Supply had shown that the imported goods were of the 3.7% classification.

Thus in summary it is argued:

Neither argument amounts, in my view, to any arguable point of law.

Firstly there was no error in the FTT misunderstanding or misstating that Laurence Supply’s case was about all of the goods not just the small proportion reflected by Item C. It well understood Laurence Supply’s case was that if it succeeded on item C that it succeeded on the rest of the goods (on the basis of an argument that the material in the other goods looked like those used for Item C). The FTT was not, as Mr Brown sought to argue, criticizing Laurence Supply for failing to make a positive case. At [8] it recorded Laurence Supply’s argument that the goods were all made either out of suedette (to be classified as “textile material”) or “leatherette” or “leather look” (to be classified as “other”). It obviously understood that it was being argued that the leather look/ leatherette in item C reflected the material of other goods. The FTT’s assessment however was that that positive case was not made good because of the absence of evidence (for instance because of the limitations of the photographic evidence as it explained at [79]) and because of a lack of evidence linking the goods to those imported as referred to in the C18. (As regards the other samples in Professor Bush’s report, as already mentioned, even if the FTT had, gone beyond the scope of case Laurence Supply had advanced and looked at those, there was still an evidential gap in terms of satisfying the FTT that such samples were representative of imported goods referred to in the C18).

Secondly there was no error in the FTT not looking beyond the way Laurence Supply had argued its case (by reference to Item C). It was not for the FTT in a case which had been subject to detailed rounds of pleadings and opportunities for provision for information to tell a taxpayer how to run its case or alert it to risks in terms of evidential gaps should the FTT not be satisfied as to the samples advanced being representative of all the remaining goods covered by the C18. As the FTT set out at [81] “the importance of the need to establish the classification of the other Goods, or at least the extent to which they correspond to Item C or Item D has been apparent throughout this appeal”.

There was also no error of approach in [82] in the FTT not standing back to look at the essential question of whether Laurence Supply had met the burden of showing the C18 goods were classified at the lower rate; the FTT plainly had that in mind throughout. At the outset it identified the key issue at [9] when it said “It follows that the Appellant will succeed in full if it can establish on the balance of probabilities that all of the goods were either Handbags or Purses with a classification of either “textile materials” or “other”. Its subsequent reasons (at [86] to [93]) for its conclusion on quantum referred to Laurence Supply’s points not establishing the classifications were wrong (for instance at [92] where it put the question as being for Laurence Supply to “establish, on the balance of probabilities, which of the imports within the C18 were wrongly classified.”)

Laurence Supply also say that to the extent it is said against it that it had put its case as being confined to Item C (to the effect that the “absent” samples were not relevant) then that limitation of scope arose from the way HMRC had put the case. In his reply Mr Brown invited me to consider how the ASoC from [75] would be looked at from the perspective of a litigant in person and submitted it was understandable for Laurence Supply to have come to the conclusion that the case was all about item C.

Moreover it is argued that it was not until HMRC’s skeleton argument for the FTT hearing was received that it was mentioned (in a short paragraph (at [67]) towards the end of that) that HMRC were not accepting the appeal against the C18 would succeed, even in the event Item C were classified at the lower rate in line with Laurence Supply’s case.

I have considered the pleadings. Having done so I conclude it ought to have been clear, from an early stage, even to an unrepresented party, that HMRC were not accepting that if Laurence Supply won on the classification of Item C that then resolved the correct C18 amount in respect of all the other goods (in other words that HMRC was accepting that if Laurence Supply won on the classification of Item C that that then meant all the C18 imports were 3.7%).

The ASoC made clear for instance at [83] : “The Appellant has failed to demonstrate that the imports covered by the C18 are not classifiable to plastic sheeting”. The ASoC also highlighted the lack of purchase orders, design specifications, marketing materials or written evidence to support Laurence Supply’s claim. Laurence Supply’s Amended Grounds of Appeal (filed at a time when it was represented by solicitors) specifically stated the appellant had supplied all the documents they had intended to supply.

The fact resolution of the classification of Item C was not determinative from HMRC’s point of view was also reflected in HMRC’s skeleton argument. That identified at [8(1)] the classification of Item C as an issue but also (at [8(2)] the question:

“Further and in any event what is the proper quantum of the C18? The answer to this question will require the Tribunal to consider whether the Appellant is able to discharge the burden of establishing that, during the relevant periods, 87% of its imported goods did conform to Commodity Code 4202 22 90 - handbags with an outer surface of textile materials, attracting a duty rate of 3.7%; or whether, as the Respondents contend, the evidence is so lacking that, irrespective of the answer to question 1, above the Appellant remains unable to demonstrate that its imports have been correctly declared.” (emphasis added)

The skeleton argument went on to argue in a section on quantum at [61] to [67] that it did not matter how Item C was classified as Laurence Supply had failed to “make any meaningful connection between : Item C, or any sample viewed by Professor Bush; and the goods that is actually imported” and that that failure was fatal to the entire basis of the appellant’s appeal..”.

I do not accept also that Laurence Supply was somehow wrongly led by HMRC into framing the case by reference to Item C. The burden which lay on it in relation to the correct classification of all of the C18 goods was clear from the outset. To the extent Laurence Supply wished to rely on the representative nature of the other samples in terms of linking them to the C18 imports it was for it to put evidence before the FTT explaining that. For their part HMRC had positively drawn attention to both concerns over the correspondence of Item C to the rest of the goods and the lack of evidence as to the goods encompassed by the C18. In any case there was no error on the FTT’s part. It rightly dealt with the case as argued before it but the appeal ultimately failed in respect of the other goods because of insufficient evidence regarding the classification of such goods.

In that regard it is worth highlighting that even if the errors advanced did amount to errors of law they would not, in the end, help Laurence Supply secure a better result on appeal. Even if it were assumed the FTT had erred in understanding the scope of Laurence Supply’s case or in not looking beyond that scope on its own initiative, and even if the further samples brought in were found to be classified at the lower rate, then the same evidential concerns, as Ms Vicary’s submissions highlighted, of showing that such classifications extrapolated to the C18 goods remained. The same conclusion would inevitably be reached given the state of evidence (and that would also be true even if the further evidence on purchase orders were admitted given the irrelevance of that.)

Permission to appeal Ground 2 is refused.