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When Kate Middleton, the future Princess of Wales, walked down the aisle to marry Prince William, her wedding dress was trimmed in elegant Cluny lace.
It was something of a family tradition, Princess Diana even had the traditional farewell lace embroidered on her wedding dress when she married King Charles, then the Prince of Wales.
But now Cluny Lace, a seven-generation family business that started making lace in 1760, is about to close. The owner says he has been struggling with HMRC’s implementation of complicated post-Brexit tariff rules.
Nearly three centuries of fashion expertise and the painstaking craftsmanship of intricately woven leaver lace is destined to disappear forever from Britain.
Charles Mason is the managing director of the firm based on the Derbyshire-Nottinghamshire border.
“I think we were killed by our own side,” said the 57-year-old, who took over the business from his father.
He told The Telegraph that an HMRC request for £10,000 was the “last straw” for a business the Mason family set up at the onset of the industrial revolution.
“We’re just going to trade off our remaining stock and see what happens,” he said, adding that he was forced to lay off six employees out of a workforce of 10.
Mr. Mason sends his laces to France to be dyed and finished because there are no dye companies left in Britain with machinery sophisticated enough to handle the delicate fabric.
The dyed lace is then sent back to the company for further work, but Mr Mason has now received a backdated duty payment claim on the goods being sent back to Britain.
Mr Mason said: ‘I think it’s terminal and I feel angry. We spent more than 200 years building our business and fought for 30 years against the global trend of textiles moving to the Far East”.
Cluny Lace was already reeling from the impact of Covid, the cost of living crisis and the war in Ukraine which has cut off the valuable Russian market.
For a company that relies 90% on exports, half of which goes to Europe, Brexit has had a chilling effect on orders from major European fashion houses even before it took effect.
The divorce from the EU and the addition of paperwork and bureaucracy have also driven up transport costs.
The Telegraph understands that the lace company has fallen foul of the intricacies of the Brexit trade deal with the EU.
Under this zero tariff deal, goods exported to the EU and vice versa are eligible for duty relief, but only if they undergo “sufficient processing”.
Such a transformation means that a returned good would be classified under a different tariff code, which allows for the exemption.
But because the lace is only finished and dyed in France, it doesn’t change enough to get a new tariff code or a duty waiver.
Instead, an 8% yarn tax is levied on the increase in value of the lace caused by its dyeing.
So if the protection money was worth £10 but increased in value to £20 after death, the duty would be payable on the £10 increase in value.
Experts have suggested this may be why HMRC hit Cluny Lace with the unpaid duty claim dating back to when Brexit took legal effect at 11pm on 31 December 2020.
When the UK was a member of the EU, no tariffs were payable because the country was part of the bloc’s single market.
Glimmer of hope
There is a glimmer of hope for the company: they can apply for a customs judgment from HMRC, which could reduce the charge.
“I am sad to confirm that Cluny Lace is far from the only UK manufacturing firm to be affected by shortcomings in the UK-EU trade deal,” said Paul Algar of the UK Fashion and Textile Association.
“We are urging the government to renegotiate those parts of the deal that are currently not working for UK companies as a matter of urgency.
“We, in common with most manufacturing industries, are finding that our companies are struggling to make the rules work.”
