Laurence Supply Co (Leather Goods) Limited v The Commissioners for HMRC

Permission to appeal from the First-tier Tribunal will be refused unless the proposed ground discloses an arguable error of law. Apparent bias is assessed objectively by asking whether a fair-minded and informed observer would conclude that there was a real possibility of bias. Ordinary social contact, a passing acquaintance, or perceived criticism which could not reasonably create personal animosity will not satisfy that test.

A tribunal does not err by deciding the case advanced by the parties. A taxpayer challenging a customs demand must adduce evidence capable of linking representative samples and other material to the imported goods covered by the demand. Evidence that does not address the applicable visual classification test, or does not establish that it concerns the relevant imports, cannot establish an arguable error of law.

Laurence Supply Co (Leather Goods) Limited renewed before the Upper Tribunal its application for permission to appeal the First-tier Tribunal’s decision, [2024] UKFTT 124 (TC). The First-tier Tribunal had allowed its appeal against a customs post-clearance demand only in respect of one handbag sample, Item C, and otherwise upheld the demand.

The customs dispute concerned whether handbags and purses imported from China had an outer surface with the visual appearance of manufactured plastic sheeting, attracting the higher duty rate, or fell within lower-rate classifications. The company alleged apparent bias arising from post-hearing social contact between one tribunal judge and a director, and challenged the First-tier Tribunal’s treatment of samples, evidence and the scope of its case.

The central question was whether either ground disclosed an arguable error of law.

1. Permission to appeal was refused on both grounds. Under section 11 of the Tribunals, Courts and Enforcement Act 2007, an appeal from the First-tier Tribunal lies only on a point of law. Permission is granted only where a ground discloses an arguable error of law.

2. The alleged post-hearing circumstances did not arguably establish apparent bias. Applying the objective test in Porter v Magill, [2002] 2 AC 357, the relevant question was whether a fair-minded and informed observer would conclude that there was a real possibility of bias. Even assuming the allegations to be true, discussion between parents at a religious and social gathering, a perceived but indirect criticism of the school, and the children’s participation in the same school trip did not amount to personal friendship, close acquaintance or animosity. The observer would take account of a judge’s duty and professional ability to put irrelevant matters aside.

3. The alleged refusal to examine further samples did not support an arguable bias ground. It was consistent with case management based on the tribunal’s view of the issues and the relevance of the samples.

4. The challenges to the factual findings and evidential approach did not disclose an arguable error of law. Even if further samples had physically been available, there remained no evidence establishing that they represented goods included in the customs demand. The later purchase orders neither addressed the required naked-eye visual test nor linked the ordered goods to the imports in issue.

5. The First-tier Tribunal understood that the taxpayer disputed the classification of all relevant goods. It was nevertheless entitled to find that the taxpayer had not proved the necessary connection between Item C, or other samples, and the remaining imports. It was not required to reconstruct or enlarge a represented party’s case after detailed pleadings and opportunities to provide evidence. Any asserted error would in any event have been immaterial because the evidential deficiency would inevitably have produced the same result.

• Upper Tribunal (Tax and Chancery Chamber): renewed application for permission to appeal refused: [2025] UKUT 31 (TCC).
• First-tier Tribunal (Tax Chamber): appeal against the customs post-clearance demand allowed in part in respect of Item C but otherwise dismissed: [2024] UKFTT 124 (TC).