Judgment summary
This decision, determined on the papers by Tribunal Judge Brooks, concerns whether the appellants complied with an unless direction issued on 20 May 2026 (1). The Tribunal found that they had not complied, meaning their appeals were automatically struck out and were no longer before the Tribunal (1).
The appeals arose from HMRC penalty assessments relating to the transportation of alcohol consignments from the UK to Belgium between 27 September 2006 and 16 November 2006, where HMRC alleged duty suspended movements were not completed (8). The appeals had been stayed behind related proceedings involving SDM European Transport Limited, which concluded with an Upper Tribunal decision on 25 April 2016 (9).
Following further delay, the Upper Tribunal on 28 November 2023 directed that the appeals proceed before the FTT and encouraged the parties to cooperate in agreeing directions for a substantive hearing (11). Almost two years later, the matter had still not been set down for a substantive hearing (12).
On 5 November 2025, Judge Snelders directed the appellants to send a list of documents to both HMRC and the Tribunal within 28 days (3). The appellants did not comply by the due date of 3 December 2025 or at all, and did not respond to a Tribunal letter of 21 April 2026 (4). On 20 May 2026, the Tribunal issued an unless order requiring compliance by 5pm on 3 June 2026, failing which the proceedings would be struck out without further reference to the parties (5).
At 16:07 on 3 June 2026, the appellants' solicitors emailed their List of Documents and response to the Tribunal, but did not copy HMRC on that email (6). HMRC subsequently notified the Tribunal that the appellants had not complied with the unless order and that the appeal stood struck out (7). The appellants disputed this, asserting HMRC was mistaken (8). HMRC provided a detailed response on 19 June 2026 contending that, by failing to send or deliver the list of documents to HMRC, the appellants had not complied with the unless order (9).
Background
The appeals concerned the transportation of multiple consignments of alcohol from the UK to an Aldi Warehouse in Belgium between 27 September 2006 and 16 November 2006 (8). The appellants were subcontracted by SDM European Transport Limited to carry out some of that transportation, and HMRC raised penalty assessments against SDM, the appellants and four lorry drivers, alleging that duty suspended movements were not completed so that the consignments were liable to excise duty in the UK (8).
The appellants' appeals were stayed behind SDM's appeal, which was finally concluded by an Upper Tribunal decision on 25 April 2016 refusing to set aside an earlier Upper Tribunal decision of 19 November 2015 finding that the relevant consignments did not arrive at the Aldi Warehouse (9).
Delays followed in getting the stayed appeals back on foot. In 2018, HMRC unsuccessfully sought to strike out the appeals on the basis that they had no reasonable prospect of success given the SDM findings (10). In 2020, the FTT determined various preliminary issues, refusing the appellants' application to bar HMRC from further participation and refusing HMRC's strike out application (10).
On 28 November 2023, the Upper Tribunal dismissed both parties' appeals against an FTT decision of 8 February 2021, directing that the appeals proceed before the FTT and encouraging cooperation to get the matter set down swiftly for a substantive hearing (11). Almost two years later, the matter still had not been set down for a substantive hearing (12).
Core dispute
The issue before the Tribunal was whether the appellants had complied with the unless direction issued on 20 May 2026, which required them, by 5pm on 3 June 2026, to confirm in writing an intention to proceed, comply with direction 2 of the 5 November 2025 directions by providing their lists of documents, or make an application to comply out of time, failing which the proceedings would be struck out without further reference to the parties (1, 5).
The appellants' solicitors emailed their List of Documents and response to the Tribunal at 16:07 on 3 June 2026, but did not copy HMRC on that email (6). HMRC contended that, because the appellants had not sent or delivered the list of documents to HMRC itself, they had not complied with the terms of the unless order, and the appeals should be treated as struck out (9). The appellants maintained that HMRC was mistaken and that there had been compliance (8).
Court findings
The Tribunal held that direction 2 of the 5 November 2025 directions stated in clear and unambiguous terms that the appellants needed to send or deliver a list of documents to both HMRC and the Tribunal, send or deliver copies of documents not already provided to HMRC, and notify the Tribunal of having done so, failing which the appeals would be struck out (13). This was found to be a direction stating that failure to comply would lead to striking out, as required by Rule 8(1) (13).
The Tribunal found that the appellants did not send or deliver their list of documents, or any copies of documents not already provided, to HMRC by 17:00 on 3 June 2026, and therefore failed to comply with the direction (14). Citing HMRC v Elite Management Consultancy [2024] UKFTT 567 (TC) at [18], the Tribunal held that the effect of non-compliance is that the automatic strike out provisions of Rule 8(1) are engaged "as night follows day" (14).
Accordingly, the appeals were automatically struck out pursuant to Rule 8(1) and, in the absence of any reinstatement application, remained struck out and no longer before the Tribunal (15). The Tribunal agreed with Elite Management Consultancy at [19] that the mandatory strike out leaves no room for application of the overriding objective in Rule 2, which is distinguished from a reinstatement application where the Tribunal exercises discretion and relief from sanctions may be considered (16).
Outcome
The Tribunal concluded that the appeals had been automatically struck out pursuant to Rule 8(1) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 and remained struck out, no longer being before the Tribunal (15).
The appellants were informed that they may apply for reinstatement of their appeals under Rule 8(5), with any such application required to be made in writing and received by the Tribunal within 28 days of the date of the decision, per Rule 8(6) (17).
The decision also confirmed that any party dissatisfied with the decision had a right to apply for permission to appeal under Rule 39, with the application required to be received not later than 56 days after the decision is sent (18).
Major issues / areas of contention
- Whether the appellants complied with the unless direction issued by the Tribunal on 20 May 2026.
- Whether sending documents only to the Tribunal, without copying HMRC, satisfied direction 2 of the 5 November 2025 directions requiring documents to be sent or delivered to both HMRC and the Tribunal.
- Whether automatic strike out under Rule 8(1) applies where a party fails to comply with an unless order.
- Whether the overriding objective in Rule 2 can override or mitigate an automatic strike out under Rule 8(1).
- The availability and procedural requirements of a reinstatement application under Rule 8(5) and Rule 8(6).