Keene Distribution Limited & Anor v The Commissioners for HMRC

A stay of civil or tribunal proceedings is not automatic because related criminal proceedings are pending, or an investigation is under way. The applicant must show a real risk of serious prejudice that may lead to injustice. The tribunal must balance the parties’ interests and consider whether safeguards can manage any risk. On an appeal from an FTT case-management decision, the Upper Tribunal should intervene only for an error of law and where the decision is plainly outside the generous ambit of the FTT’s discretion. Speculative concerns about the possible use of civil findings in a future criminal trial did not meet the required threshold here.

Keene Distribution Limited and Mohammed Naseemdost appealed tax decisions concerning VAT return periods from November 2011 to May 2015. They asked the First-tier Tribunal (Tax Chamber) to postpone the substantive hearing because Mr Naseemdost was subject to separate HMRC and Greater Manchester Police criminal investigations. The FTT refused the postponement, and later refused permission to appeal.

The Applicants renewed their permission application to the Upper Tribunal. After an initial refusal, they sought oral reconsideration. The central issues were whether the FTT had misdirected itself about the law governing a stay pending criminal proceedings and whether its refusal was outside the permissible range of case-management discretion.

1. Permission refused. An appeal from the FTT lies only on a point of law. Permission requires a realistic prospect of success or, exceptionally, another good reason. In this Chamber, the grounds must disclose an arguable error of law material to the outcome, or another compelling reason. The Applicants’ grounds met neither condition.

2. The FTT’s decision was an evaluative case-management decision. The Upper Tribunal should not interfere where the FTT applied the correct principles and considered relevant matters, unless the decision was so plainly wrong as to fall outside the generous ambit of its discretion. The Tribunal should exercise extreme caution before allowing an appeal of that kind. The FTT had identified the applicable discretion and considered the relevant material.

3. A stay pending criminal proceedings is discretionary. There is no automatic entitlement to one because a charge has been brought, still less because there is only an investigation. The applicant must show a real, rather than notional, risk of serious prejudice that may lead to injustice. The tribunal must balance justice between the parties, including the claimant’s interest in having the civil claim decided, and consider whether safeguards can adequately address any risk.

4. The FTT had been entitled to refuse a stay. The tax proceedings concerned a different period from the criminal investigations, no charges had been brought, and the investigations might take considerable time. The possible emergence of adverse findings or evidence was speculative. Any question about the admissibility or effect of FTT findings in a criminal trial would be for the criminal court. The FTT hearing could proceed without preventing a fair criminal trial, while a stay would delay the tax appeals and would not materially relieve costs already incurred.

5. The new submission about the personal circumstances of the Applicants’ representative was not a ground on which the FTT had made its decision. It was a fresh application for a stay on different grounds, outside the Upper Tribunal’s jurisdiction in this permission application. If pursued, it should be made to the FTT. Permission to appeal was refused on all grounds because none disclosed an arguable material error of law or another compelling reason.

1. Upper Tribunal (Tax and Chancery Chamber): Following an earlier refusal of permission, the Upper Tribunal reconsidered the renewed application at an oral hearing and refused permission on all grounds. The written reasons were issued as [2026] UKUT 404 (TCC) .
2. Upper Tribunal (Tax and Chancery Chamber): By a decision notice dated 14 October 2026 and released on 15 October, the Tribunal had dismissed the Applicants’ renewed permission application. The Applicants then applied for oral reconsideration.
3. First-tier Tribunal (Tax Chamber): By a letter dated 29 September 2026, the FTT refused to postpone the substantive hearing. It refused permission to appeal on 8 October 2026.