Apple fights British tax authorities over classification of Watch straps


British tax authorities are battling to recover millions of pounds from Apple in a case relating to whether the straps of its smartwatches should be classified as part of the timepiece or not.

HMRC argues that that the wristband of the Apple Watch is classified as “other plastic”, which would attract a 6.5% import tarrif on each strap.

A 42mm white sports band can be bought separately from an Apple Watch from its own website for £49.

Apple Distribution International argues that the 6.5% tax is is not warranted because the strap is integral to the watch, which cannot function without it.

If Apple’s appeal is successful, the straps would enjoy the same duty-free status as smartphones.

“The strap does not adapt or add functionality to the Apple Watch,” Stephen Cock, barrister for Apple Distribution International told a tribunal last week.

“Without the band the Apple Watch cannot be worn on the user’s wrist and thus is unable to function as designed,” he said.

The tribunal reserved its judgement.



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