Tougher regulations for e-commerce distributors in the UK

Many of your clients will be unaware of a new HMRC clampdown on traders selling goods from outside the E.U. (fulfillment houses).

 

The definition of a ‘fulfilment business’ can be anything from a large-scale operation to an individual channeling goods through a spare room at home.

 

Any UK business that stores goods imported from a country outside the EU or that are owned by or stored on behalf of someone established outside the EU or that stores goods being offered for sale and haven’t been sold in the UK before will need to register with the HMRC Fulfilment House Due Diligence Scheme. 

Those existing fulfilment businesses who fail to register by 30th June this year will incur a £500 fine for every month that they are late, up to a maximum of £3,000.

 

Once a business has been approved businesses will be put on a register and must keep certain records and carry out checks on any overseas customer and the goods they store

If a fulfilment house operator has reasonable grounds to suspect that a business or individual has not met its VAT/Customs obligations, there is an obligation to notify HMRC and not do any more business with that party. Any breach of that would lead to a £3000 penalty. Non-compliance could lead to a company going out of business entirely.

 

For further information visit https://www.gov.uk/guidance/fulfilment-house-due-diligence-scheme