HMRC is seeking views on detailed rules set out in draft regulations for operation of the new fulfilment house due diligence scheme, which the government intends to introduce in April 2018. The second Finance Bill 2017 contains primary legislation for the scheme.
HMRC is seeking views on detailed rules set out in draft regulations for operation of the new fulfilment house due diligence scheme, which the government intends to introduce in April 2018. The second Finance Bill 2017 contains primary legislation for the scheme.
The new scheme covers fulfilment houses that store and handle goods imported from outside the EU and is part of the government’s plans to tackle the estimated £1bn to £1.5bn in VAT lost to the exchequer each year resulting from abuse by overseas traders selling goods via online marketplaces to UK customers. Existing fulfilment businesses in the UK will have to register with HMRC by 30 June 2018, keep certain records and carry out due diligence checks on their overseas customers. New businesses commencing between 1 April 2018 and 30 June 2018 must apply for approval by 30 September 2018.
HMRC is interested to hear views on the impact of the record-keeping and due diligence requirements on affected businesses. The draft regulations require approved businesses to:
notify HMRC within 30 days where it suspects customers of having failed to meet VAT or customs duty obligations in relation to non-EU goods; and
avoid carrying on business with anyone named in a notice issued by HMRC for such failures.
HMRC can charge a penalty of up to £3,000 for contraventions of these obligations and up to £500 for late registration applications.
Approved businesses must then issue a notice to all their overseas customers within 30 days of receiving approval, or by 30 April 2019 at the latest, informing them of the obligations imposed by the scheme in the UK, including penalties. They must carry out due diligence, including:
verifying the VAT registration number for each customer within 30 days of receiving approval, or by 30 April 2019 at the latest;
notifying HMRC of any change in details; and
notifying HMRC when ceasing to carry on a non-EU goods fulfilment business.
They must also keep records for each of their customers, including:
name and contact details;
VAT registration number;
type and quantity of third country goods stored;
import entry number of these goods; and
delivery address from storage.
Another area on which HMRC would like comments is the extent to which provisions for approval of group companies in Part 5 of the regulations will be beneficial. These require:
group applications to identify the representative member;
the representative member to carry out all obligations under the regulations;
companies to be members of not more than one approved group; and
companies leaving the group to notify HMRC.
Comments on the draft Fulfilment Businesses (Approval Scheme) Regulations 2018 should be submitted by 15 December 2017. See http://bit.ly/2gwYZOG.
HMRC is seeking views on detailed rules set out in draft regulations for operation of the new fulfilment house due diligence scheme, which the government intends to introduce in April 2018. The second Finance Bill 2017 contains primary legislation for the scheme.
HMRC is seeking views on detailed rules set out in draft regulations for operation of the new fulfilment house due diligence scheme, which the government intends to introduce in April 2018. The second Finance Bill 2017 contains primary legislation for the scheme.
The new scheme covers fulfilment houses that store and handle goods imported from outside the EU and is part of the government’s plans to tackle the estimated £1bn to £1.5bn in VAT lost to the exchequer each year resulting from abuse by overseas traders selling goods via online marketplaces to UK customers. Existing fulfilment businesses in the UK will have to register with HMRC by 30 June 2018, keep certain records and carry out due diligence checks on their overseas customers. New businesses commencing between 1 April 2018 and 30 June 2018 must apply for approval by 30 September 2018.
HMRC is interested to hear views on the impact of the record-keeping and due diligence requirements on affected businesses. The draft regulations require approved businesses to:
notify HMRC within 30 days where it suspects customers of having failed to meet VAT or customs duty obligations in relation to non-EU goods; and
avoid carrying on business with anyone named in a notice issued by HMRC for such failures.
HMRC can charge a penalty of up to £3,000 for contraventions of these obligations and up to £500 for late registration applications.
Approved businesses must then issue a notice to all their overseas customers within 30 days of receiving approval, or by 30 April 2019 at the latest, informing them of the obligations imposed by the scheme in the UK, including penalties. They must carry out due diligence, including:
verifying the VAT registration number for each customer within 30 days of receiving approval, or by 30 April 2019 at the latest;
notifying HMRC of any change in details; and
notifying HMRC when ceasing to carry on a non-EU goods fulfilment business.
They must also keep records for each of their customers, including:
name and contact details;
VAT registration number;
type and quantity of third country goods stored;
import entry number of these goods; and
delivery address from storage.
Another area on which HMRC would like comments is the extent to which provisions for approval of group companies in Part 5 of the regulations will be beneficial. These require:
group applications to identify the representative member;
the representative member to carry out all obligations under the regulations;
companies to be members of not more than one approved group; and
companies leaving the group to notify HMRC.
Comments on the draft Fulfilment Businesses (Approval Scheme) Regulations 2018 should be submitted by 15 December 2017. See http://bit.ly/2gwYZOG.
