24/10/2017
Tackling Vat fraud on goods imported from outside the EU (UK)
Draft regulations implementing a scheme to tackle a major source of Vat and duty avoidance by deterring and disrupting rogue non-EU businesses that sell goods imported and stored by UK fulfilment houses to UK customers could also have a significant impact on small and micro businesses in the warehousing, storage, fulfilment, imported goods, transport and e-commerce sectors.
First announced in Budget 2016, the Fulfilment House Due Diligence Scheme will set standards for due diligence and record keeping designed to help tackle Vat avoidance that is estimated by HM Revenue & Customs to account for £1bn to £1.5bn of the total Vat gap.
The consultation, ‘Draft legislation: the Fulfilment Businesses (Approval Scheme) Regulations 2018’, specifically seeks the views of small and micro businesses on the potential impact on them of legislation requiring fulfilment businesses to register with HMRC from 2018, keep certain records and carry out robust due diligence checks on their overseas customers.
This will make it more difficult for non-compliant overseas businesses to trade in the UK and will enable HMRC to identify and tackle them more easily. HMRC will publish a register to allow businesses to check whether they are dealing with compliant fulfilment businesses.
HMRC also intends the consultation to improve its understanding of
- the impact on fulfilment businesses of the record-keeping requirements and other scheme obligations
- whether the provisions for group registrations in Part 5 will be beneficial to group companies
‘Fulfilment house due diligence scheme’ sets out the responses to the original 2016 consultation setting out the proposed scheme, together with feedback, the government’s response and draft legislation.
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