Electric Mobility Euro Limited & Ors v The Commissioners for HMRC [2025] UKFTT 333 (TC)

[2025] UKFTT 00333 (TC)Case No TC09461
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 7 March 2025Date Judgment date: 12 March 2025
By remote video hearing
Appeal references: TC/2021/01611
TC/2022/12255;TC/2022/00335
TC/2024/01265;TC/2024/01268
TC/2024/03700;TC/2024/03829
TC/2024/04904
PROCEDURE – appeals against HMRC decisions relating to importations made before and after Brexit – application to stay appeals behind UT case– application allowed in relation to pre-Brexit importations, but refused in relation to post-Brexit importations – further Tribunal appeal references to be issued
Before
TRIBUNAL JUDGE ANNE REDSTON
Between
ELECTRIC MOBILITY EURO LIMITEDAppellantFREERIDER LUGGIE UK LIMITEDAppellantDRIVE DEVILBISS HEALTHCARE LIMITEDAppellantSUNRISE MEDICAL LIMITEDAppellantTGA MOBILITY LIMITEDAppellantTHE COMMISSIONERS FORRespondentHIS MAJESTY’S REVENUE AND CUSTOMSRespondentPhilippe Freund, barrister, of Fieldfisher LLP, instructed by the Appellants for AppellantsSimon Pritchard of Counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs for RespondentsDECISION

Background

[1]These appeals concern the correct classification of mobility scooters for customs purposes; this has been a contentious issue for over two decades.[2]The first round of litigation concerned scooters imported into the UK between 2004 and 2007. The FTT referred that issue to the CJEU, and in the light of its decision, went on to allow the appellants’ appeals, see Invamed v HMRC [2016] UKFTT 0775 (TC).[3]The UT overturned that judgment, but in Invamed v HMRC [2020] EWCA Civ 243 (“Invamed CA”) the Court of Appeal reinstated the FTT’s decision. As a result, the mobility scooters in issue were classified under heading 8713 as “carriages for disabled persons” rather than under heading 8703 as “motor vehicles principally designed for the transport of persons”, as HMRC had contended was the position. Importations under the first heading are free of duty, importations under the second attract duty of 10%.[4]On 28 August 2009, Commission Regulation (EC) No 718/2009 (“the 2009 Regulation”) came into force. The Annex to that Regulation has two columns: the left hand column is headed “description of the goods”, and describes a four wheeled mobility scooter and a three-wheeled mobility scooter; the right hand column is headed “reasons”, and in respect of both the four wheeled and three wheeled scooter, states that:
“Classification under heading 8713 is excluded as the vehicle is not speciallydesigned for the transport of disabled persons and it has no special features toalleviate a disability… The vehicle is therefore to be classified under CN code 8703 10 18 as a motor vehicle principally designed for the transport of persons.”
[5]In reliance on the 2009 Regulation, HMRC refused various claims by importers on the basis that the mobility scooters were classified under heading 8703 rather than heading 8713. The importers appealed to the FTT. The appeals of Electric Mobility Euro Ltd (“EMEL”) and Sunrise Medical Ltd (“Sunrise”), which concerned importations between 2016 and 2020, were joined and heard together as an informal lead case with other appeals stayed behind them. On 3 July 2024, the FTT issued its decision allowing the appeal, see EMEL and Sunrise v HMRC [2024] UKFTT 00590 (TC) (“EMEL”).[6]The FTT’s findings in relation to the 2009 Regulation included the following:(1) there were no “material differences” between the scooters in issue and those described in the left hand column of the 2009 Regulation; but(2) the scooters were not “sufficiently similar” to those described in the right hand column of the 2009 Regulation because they did not havethe factual characteristic of being “not specially designed for the transport of disabled persons”.[7]The FTT granted HMRC permission to appeal to the Upper Tribunal (“UT”). One of HMRC’s appeal grounds is that the FTT was wrong to find that that the scooters were not “sufficiently similar” to those in the 2009 Regulation. By way of a Respondent’s Notice, EMEL challenged the FTT’s finding that there were no “material differences” between the scooters in issue and those in the 2009 Regulation. The case is expected to be heard by the UT in October 2025.[8]Several appeals have been stayed behind EMEL, including:(1) TGA Mobility Ltd (“TGA”), under reference TC/2021/01611;(2) Drive Devilbiss Healthcare Ltd (“DDHL”), under reference TC/2022/12255;(3) Freerider Luggie Ltd (“FLL”), under reference TC/2022/00335; and(4) Sunrise, under reference TC/2024/01265.[9]All those appeals related to importations made between(a) 28 August 2009, when the 2009 Regulation came into force, and(b) 11pm on 31 December 2020, when the UK left the European Union (“Brexit”). For the purposes of this judgment, I have called these cases “the pre-Brexit stayed appeals”.[10]Between 11pm on 31 December 2020 and 24 October 2021 the Taxation (Cross-Border Trade) Act 2018 (“the TCTA”) was in force, but there were no specific UK regulations or related customs chapter notes dealing with mobility scooters. The Appellants called this the “window period” and I have adopted the same phraseology[11]On 25 October 2021, the “Additional Chapter Notes” dealing with mobility scooters entered into force; these were made under the vires given by the TCTA and the related regulations. I have called this “the TCTA period”.[12]In 2024, the following additional appeals were made (“the 2024 appeals”):(1) by EMEL, under reference TC/2024/01268;(2) by Sunrise, under reference TC/2024/03700;(3) by TGA, under reference TC/2024/03829; and(4) by DDHL, under reference TC/2024/04904.[13]Although all the 2024 appeals (except that of Sunrise) included pre-Brexit importations, they also included importations made during the “window period” and during the TCTA period.

HMRC’s Applications

[14]On 22 August 2024, HMRC applied to the Tribunal to stay the 2024 appeals behind EMEL. On behalf of the Appellants, Fieldfisher objected. After some correspondence between the Tribunal and the parties, I directed an oral hearing.[15]Mr Freund represented the Appellants, and Mr Pritchard represented HMRC. Both had also appeared at the hearing of EMEL, and so were very familiar with the background.[16]It was evident from both skeleton arguments that there was a dispute as to whether some or all of the 2024 appeals had been made in time, and it also became clear in the course of the hearing that this was a live issue in relation to the pre-Brexit stayed appeals. As the FTT has no jurisdiction in relation to a late appeal unless it gives permission for the case to proceed, I turned to this matter first.

The late appeals

[17]There were two late appeal issues: those relating to the 2024 appeals and those relating to the pre-Brexit stayed appeals. The 2024 appeals[18]The time limits for customs appeals such as this are not straightforward. Mr Freund’s skeleton included a summary of that law, together with a detailed explanation as to why, in his submission, all the 2024 appeals were in time. Mr Freund also set out the reasons why the Tribunal should give permission to appeal late if (contrary to his primary position) the appeals were out of time.[19]HMRC did not realise, until skeleton arguments were exchanged, that this late appeal issue would be considered by the Tribunal at this case management hearing, but Mr Pritchard accepted that it was necessary, because I could not decide HMRC’s application to stay the 2024 appeals if I had no jurisdiction. Mr Pritchard went on to accept that two of the 2024 appeals were in time, but said that by HMRC’s calculation one was around three weeks late and the other was two weeks late.[20]I decided it was not necessary to rule on which party was correct about the underlying legislation, or on how it applied to the Appellants, because I agreed with Mr Freund that if any of the appeals were out of time, it was in the interest of justice to give permission for them to be admitted late. This was because:(1) any non-compliance was neither serious nor significant; and(2) taking into account all the circumstances of the case, including the complexity of the legislation; the inter-partes communications at the relevant time; the prejudice to the parties and the need for compliance, the balance favours the Appellants. The pre-Brexit stayed appeals[21]In contrast to the detailed information provided by the Appellants about the 2024 appeals, the only material which considered whether the pre-Brexit stayed appeals had met the time limits was contained in the grounds of appeal filed with the Tribunal.[22]The lack of relevant information in Mr Freund’s skeleton and in Fieldfisher’s pre-hearing correspondence meant that Mr Pritchard only became aware that this issue would be considered when it was raised in the course of the hearing, and he was not in a position to make related submissions.[23]For the same reasons, I was unable to decide(a) whether or not any or all of the pre-Brexit stayed appeals were late, and(b) if so, whether permission should be given for them to be proceed.[24]Taking into account the foregoing, the parties agreed that this matter should be decided after the hearing, and it is reflected in my post-hearing directions. Stay of

The 2024 appeals

[25]I begin with the law, and then discuss the parties’ submissions.

The law

[26]In HMRC v RBS Deutschland Holdings GmbH [2006] CSIH 10, [2007] STC 814, Lord Osborne, delivering the opinion of the Court of Session (Inner House), said at [22]:
“…As we would see it, a tribunal or court might sist [stay] proceedings against the wish of a party if it considered that a decision of another court would be of material assistance in resolving the issues before the tribunal or court in question and that it was expedient to do so.”
[27]In Coast Telecom Ltd v HMRC [2012] UKFTT 307 (TC), Judge Berner considered RBS Deutschland and went on to hold at [21] that the “question is not whether the determination of another court might provide assistance, but whether it willprovide material assistance”. That approach has been followed in many subsequent cases.[28]I therefore need to decide whether the UT’s judgment in EMEL will provide material assistance in resolving the 2024 appeals, and whether it is expedient to direct a stay.[29]In McMeekin v HMRC [2023] UKFTT 00223 (TC) I considered the meaning of “expedient”, and in reliance on the Oxford English Dictionary found that it means “convenient and practical”, “suitable or appropriate” and “conducive to advantage in general or to a general purpose, suitable to the circumstances of the case”. In the context of the 2024 appeals, relevant factors include those in Rule 2 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“the Tribunal Rules”), in particular the need to(a) “avoid delay in so far as compatible with proper consideration of the issues” and(b) deal with the appeals “in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties”.

The submissions

[30]The parties’ submissions focussed on each of the three periods set out above: the pre-Brexit period, the window period, and the TCTA period. However, there were also the following overarching submissions.(1) Mr Pritchard emphasised that these appeals were important because of “the wider political and constitutional context within which the question of the classification of mobility scooters arises”. He explained that submission as follows: (a) If the classification of mobility scooters under UK law was held to be different to that in the EU, this would have implications for Northern Ireland. (b) In accordance with the “Windsor Framework”, a dual tariff arrangement operates, under which goods at risk of being moved to the EU from Northern Ireland are subject to EU tariff rules, but those not at risk are classified under the rules in Great Britain (“GB”). (c) If mobility scooters were classified under 8713 in GB, but under 8703 in the EU, there will be non-alignment under the dual tariff arrangement.(2) Mr Freund stressed the importance of avoiding delay, given the long history of litigation involving some or all of the Appellants. He estimated that the EMEL appeal would not be finally determined until 2028, and that if the 2024 appeals were stayed behindthat final decision, the Appellants would not know the outcome until around 2031.

The pre-Brexit period

[31]It was common ground that the law which applied in the pre-Brexit period would be decided by the final judgment in EMEL. Mr Pritchard said that, as a result, EMEL would t plainly be of material assistance when deciding the correct categorisation of the importations made by the Appellants during this period.[32]Mr Freund did not dissent from that submission, but said that the Tribunal should nevertheless not stay the 2024 appeals, because the importations during the pre-Brexit period were only £710k, around 15% of the total in issue, and the final judgment in EMEL would not give material assistance to deciding the remaining 85% of importations, for the reasons given below.

The window period

[33]The 2024 appeals included importations of £1.3m during the window period.[34]Mr Pritchard accepted that any dicta about the 2009 Regulation which might be made by the UT or higher courts when deciding EMEL would not be binding in relation to the importations during the window period, because EU law did not apply, and although the TCTA was in force, no provisions about the classification of mobility scooters were in force.[35]He nevertheless submitted that dicta of the UT or higher courts about the 2009 Regulation would be “persuasive” in relation to importations during the window period, and that the same was true of BG Technik (C-129/23 and C-567/23) (“BG Technik”), a CJEU judgment about mobility scooters which was published after Brexit.[36]Mr Freund strongly disagreed, saying that Sch 7, para 1 of the TCTA provides that “any direct EU legislation…ceases to have effect” and that “nothing in any direct EU legislation…is to have effect in relation to import duty”; and that as the 2009 Regulation is “direct EU legislation” it has no effect on post-Brexit importations, and cannot therefore be “persuasive”.[37]It followed, said Mr Freund, that the final judgment in EMEL would not provide “material assistance” to a tribunal or court tasked with deciding the correct customs classification of importations during the window period, and that a stay would also not be “expedient” for the reasons set out at §30.

The TCTA period

[38]The 2024 appeals included importations of around £3.4m during the TCTA period. It was common ground that during this period:(1) the 2009 Regulation did not apply;(2) any dicta about that Regulation which might be made by the UT or higher courts in the course of EMEL would not be binding; and(3) a tribunal or court considering the classification of disability scooters would be required to have regard to the “Additional Chapter Notes” made under the vires given by the TCTA and the related regulations.[39]Mr Freund submitted that the final decision in the EMEL case plainly would not provide material assistance to a Tribunal deciding the 2024 appeals and a stay would not be “expedient”, for the reasons set out at §30.[40]Mr Pritchard’s position was that it was not in the interests of justice to divide each 2024 appeal into parts, and that as a stay was appropriate for the pre-Brexit importations, that stay should apply to the 2024 appeals as a whole.

Discussion and decision

[41]As can be seen from the foregoing, Mr Freund asked me to refuse the stay on the basis that the majority of the importations fell within the second two periods. Mr Pritchard asked for the stay to be applied to all three periods, on the basis that(a) the test was satisfied for the first period, and(b) the UT judgment would be “persuasive” in relation to the other two periods, and also because of the Northern Ireland issue.[42]I did not agree with Mr Pritchard that the Northern Ireland issue was relevant. If the Appellants are right on classification, there may be non-alignment under the dual tariff arrangement. However, the fact that a particular outcome results in non-alignment cannot affect the analysis of the relevant law; non-alignment would instead be a consequence of the law. Moreover, the fact that there will be some non-alignment must have been envisaged when the Windsor Framework was put in place. Interpreting the law so as to avoid non-alignment is, in my view, to put the proverbial cart before the horse.[43]However, there is a third option in addition to those put forward by the parties. Rule 5 of the Tribunal Rules is headed “Case management powers” and it begins:
“(1) Subject to the provisions of the 2007 Act and any other enactment, the Tribunal may regulate its own procedure. (2) The Tribunal may give a direction in relation to the conduct or disposal of proceedings at any time, including a direction amending, suspending or setting aside an earlier direction. (3) In particular, and without restricting the general powers in paragraphs (1) and (2), the Tribunal may by direction— (a) … (b) consolidate or hear together two or more sets of proceedings or parts of proceedings raising common issues…” (a) … (b) consolidate or hear together two or more sets of proceedings or parts of proceedings raising common issues…”
[44]Rule 2 sets out the overriding objective of dealing with cases justly, and then says at (3):
“The Tribunal must seek to give effect to the overriding objective when it— (a) exercises any power under these Rules; or (b) interprets any rule or practice direction.”
[45]Rule 5(3)(a) thus specifies that the Tribunal has the power to consolidate (merge) two appeals made by the same appellant so they become one appeal. No equivalent provision states that the Tribunal may split a single appeal so the parts proceed separately, but Rule 5(1) provides that “the Tribunal may regulate its own procedure” and the specific powers in subparagraph (3) are preceded by the proviso that they do not restrict that general power.[46]I agree with Mr Pritchard that the final judgment in EMEL would provide material assistance in determining the correct customs classification of the Appellants’ importations during the pre-Brexit period. I came to that conclusion because the UT has specifically been asked by the parties to rule on the FTT’s application of the words “material differences” and “sufficiently similar”.[47]It would be inexpedient (and not in the interests of justice) for the FTT to embark on deciding the classification of different models of mobility scooter which had been imported during the pre-Brexit period, given that the UT (or a higher court) was likely to give a binding ruling on how the description and reasons of the 2009 Regulation should be applied. Although lifting the stay would “avoid delay”, it would not be “compatible with proper consideration of the issues”.[48]However, I also agreed with Mr Freund that this was not the position for importations after 11pm on 31 December 2020. The law was then entirely different. Although it was possible that dicta of the UT or a higher court might be persuasive, it was equally possible that it would be entirely irrelevant. In relation to these subsequent importations, it was therefore not the case that a stay behind EMEL “will” or “would” provide material assistance.[49]As regards expediency, I agreed with Mr Freund that HMRC were likely to seek permission to appeal an adverse UT decision in EMEL, and they were also likely to seek to appeal an adverse Court of Appeal decision, in particular because of the Northern Ireland issue set out above. I also agreed that Mr Freund’s time estimate was reasonable, so that if the 2024 appeals were stayed in their entirety behind EMEL, they would not be determined until a decade after the importations in question, despite the fact that most of the legal issues were different.[50]I therefore find that it is in the interests of justice to split each of these appeals between(a) the pre-Brexit period;(b) the window period, and(c) the TCTA period. I have directed the Tribunal Service to issue new appeal references for the later periods.[51]Before coming to that conclusion, I considered whether it would be preferable to have only two periods: one pre-Brexit period, and one post-Brexit. However, I decided that three periods allowed more flexibility: for instance, it may be easier to reach a final decision in relation to the window period, perhaps for the reasons given by Mr Freund, see §63.[52]Having come to that conclusion, I next considered whether all four of the 2024 appeals should go forward to a hearing. HMRC had produced a schedule setting out which scooters were involved in each appeal, but it appeared to be common ground that this was not accurate. Nevertheless, I assume that each Appellant’s scooters have some characteristics which make them different from their competitors. If all four appeals were joined, the FTT would be required not only to make making findings about the law, but also to apply those findings to each scooter imported by four Appellants. That would thus significantly increase the time and costs of the hearing, compared to having a smaller number of appeals. I therefore decided it was not in the interests of justice for all four to proceed, but instead for two to go forward and two to be stayed.[53]In summary, I decided as follows:(1) The 2024 appeals made by EMEL, TGA and DDHL is to be separated into three parts, with the part which relates to the pre-Brexit period retaining the current reference number; that part will be stayed behind EMEL. New Tribunal reference numbers will be issued for the window period and the TCTA period.(2) The 2024 appeal made by Sunrise will be separated into two parts, with the window period retaining the original Tribunal reference number; a new reference number will be issued for the TCTA period.(3) The appeals of two Appellants in relation to (a) the window period and (b) the TCTA period will be joined and proceed together;(4) The appeals of the other two Appellants will be stayed behind the appeals in (3).

The pre-Brexit stayed appeals

[54]In relation to the pre-Brexit stayed appeals, it was Mr Freund’s position that Fieldfisher had applied to lift those stays. Mr Pritchard disagreed, saying that no such application had been made.[55]However, it was clear that Fieldfisher had applied to consolidate three of those appeals with the 2024 appeals made by the same appellant. I accepted that, by necessary implication, the consolidation application included an application to lift the stays.[56]In relation to the fourth Appellant, FLL, I agreed with Mr Pritchard that there had been no written application for the stay to be lifted. Mr Freund accepted this was the position, and made an oral application to lift the stay.[57]I have decided that all four of these appeals should remain stayed, for the same reasons as set out above in relation to the pre-Brexit part of the 2024 appeals. In consequence, there is little or nothing to be gained by consolidating the appeals of three Appellants, and I refuse the applications.

other matters

[58]There were a number of other matters before the Tribunal, as set out below.

The other scooter models

[59]The Appellants were concerned that if the UT (or a higher court) upheld the FTT’s judgment in EMEL, HMRC would not then concede the stayed pre-Brexit appeals, but would consider whether to litigate those cases too. Mr Pritchard could give no undertaking as to the position.[60]Mr Freund therefore asked, in the alternative, that the Tribunal “unstay” these appeals to the limited extent of issuing directions requiring HMRC to decide now whether or not they accepted that the scooters in the stayed pre-Brexit appeals were sufficiently similar to those considered in EMEL, and if not, why not.[61]However, given that the UT will need to decide how the scooters in EMEL should be compared with those in the 2009 Regulation, I agreed with Mr Pritchard that it was not in the interests of justice for the Tribunal to issue directions requiring HMRC to carry out a comparison exercise between the EMEL scooters and those in the pre-Brexit stayed appeals, before the UT have issued their judgment.[62]The Appellants are of course free to provide HMRC with more information about the scooters in(a) the stayed pre-Brexit appeals, and(b) the pre-Brexit part of the 2024 appeals, and HMRC agreed at the hearing that they would consider that information were it to be provided.

Preliminary issue application

[63]At the end of the hearing, Mr Freund submitted that:(1) the law which applied during the window period was essentially the same as that in force before the 2009 Regulation; and(2) that law had been decided by Invamed CA.[64]He then made an oral application for the Tribunal to direct that this point be decided as a preliminary issue. I refuse that application, both because it was made without notice to HMRC or to the Tribunal, and also because the UT and the courts have repeatedly warned about the difficulties which often arise when a particular point is identified to be decided as a “preliminary issue”.[65]In Boyle v SCA Packaging [2009] 4 All ER 1181Lord Hope said that the “power that tribunals have to deal with issues separately at a preliminary hearing should be exercised with caution and resorted to only sparingly”. In Tilling v Whiteman [1979] 1 All ER 737, Lord Scarman said:
“Preliminary points of law are too often treacherous short cuts. Their price can be, as here, delay, anxiety, and expense.”
[66]In Wrottesley v HMRC [2015] UKUT 0637, the UT, having considered those and other authorities, set out the approach which a Tribunal should take when deciding whether to direct that a point be decided as a preliminary issue. Since Mr Freund’s application was made without notice, it is plainly not possible for me to be satisfied that the principles set out at [28] of Wrottesley are met.

The “look-back” issue

[67]EMEL’s 2024 appeal included a claim made on 4 July 2023 relating to importations from March 2019. Mr Freund submitted that the claim was nevertheless within time, for reasons set out in the grounds of appeal; Mr Pritchard disagreed. However, after some discussion, both parties agreed that the this matter could not be resolved at this case management hearing.

Reallocation as complex

[68]Two of the 2024 appeals – that by EMEL under reference TC/2024/03700 and that by TGA under reference TC/2024/03829 – had been allocated by the Tribunal to the “standard” track under Rule 23, while the other appeals of the same Appellants had been allocated to the “complex” track. Mr Freund applied for these two cases to be reallocated as complex; HMRC did not object. I allow the application.

Directions

[69]Directions have been issued at the same time as this decision which reflect the points decided above.

Right to apply for permission to appeal

[70]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to "Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)" which accompanies and forms part of this decision notice. Release Date: 12th MARCH 2025