HMRC’s Fulfilment House Due Diligence Scheme


Why would you need to apply for the Fulfilment House Due Diligence Scheme?

You may need to apply for the Fulfilment House Due Diligence Scheme if you store goods in the UK for sellers established outside the EU.

This scheme is designed to help HMRC ensure compliance recording of overseas clients and what goods are stored in the UK on their behalf.

Penalties will be charged if you don’t apply, don’t register at the right time or keep incorrect records. 


Will this affect my business?

If your business stores any goods to be sold, that have been imported into the UK from outside the EU and they belong to someone who is established outside the EU then its compulsory for your business to register for this Scheme.

You will not need to register if you own the stored goods, or your main business activity is transporting goods and part of this service includes temporary overnight storage.


When do you need to apply for the fulfilment house due diligence scheme?

If you’re already trading as a fulfilment business you must apply by 30 June 2018. Online applications start on 1 April 2018.

If you start trading as a fulfilment business on or after 1 April 2018 the deadline for applications is extended to 30 September 2018.

If your business is covered by this scheme you must be registered by 1 April 2019.


Joining the register

Don’t delay as it sounds like the application process could be lengthy. When you apply HMRC will review the information provided against records they have on file. More information may be requested or a site visit performed.

HMRC will also look at partners, directors and other key people involved in the business to establish compliance history, if relevant criminal convictions have been spent and any previous connection with or involvement with fraud.

After all this has been performed HMRC will confirm if the application has been approved.


Non-registration penalties

Any fulfilment business not approved to join the scheme by 1st April 2019 will not be allowed to trade and could incur a £10,000 penalty and a criminal conviction if they do trade after that date without joining the register.


Late registration penalties

Late applications can result in a penalty of £500 and an additional £500 for each month a registration is late, with a maximum penalty of £3,000.


Requirements from 1 April 2019

Scheme members must verify all their overseas clients’ VAT registration numbers. If members suspect their overseas clients have not met any VAT or customs duty obligations, they are obliged to notify HMRC, are expected to assist their overseas clients to help make sure they do comply and must stop working with them if HMRC sends out a notice to do so. There are penalties of between £500 and £3,000 if you don’t do these checks.

After registration, detailed records must be kept of overseas clients’ names, contact details, VAT registration numbers, type and quantities of goods stored in members’ UK warehouses, import entry numbers, delivery addresses and any notices that need to be given to the overseas clients which explain their tax and duty obligations in the UK. There will be a penalty of £500 for not retaining these records for six years.


Annette Woods

Tax Advisor, Vantage Fee Protect


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