UK Court of Appeal Says Build-a-Bear's Accessories Subject to 4.7% Duty Rate

The U.K. Court of Appeal in a June 21 judgment dismissed a case from Build-a-Bear Workshop over the classification of accessories for its stuffed bear imports. Build-a-Bear originally filed the case to avoid the 4.7% duty rate for the accessories, which included clothing and wigs, footwear, plastic and textile hearts and animal accessories, and seek duty-free treatment. In March, the Upper Tribunal Tax and Chancery sided with Her Majesty's Revenue and Customs agency that the accessories should be classified as "other toys" (see 2104010047).

Build-a-Bear took the case to the Court of Appeal, arguing that the items should be classified as accessories of dolls, which benefit from a duty-free rate. The U.K. argued that the accessories fall under the "Toys Subheading" of Chapter 95 of the Combined Nomenclature, which provides for "Toys representing animals or non-human creatures." Lady Justice Philippa Whipple penned the judgment, holding that Note 3 to Chapter 95, which provides for "parts and accessories which are suitable for use solely or principally with articles of this chapter are to be classified with those articles," is disapplied from the Dolls Subheading but not disapplied from the Toys Subheading. As such, the accessories fall under the Toys Subheading and are subject to the 4.7% duty rate, the judge said.