Fulfilment House Due Diligence Scheme
The term “fulfilment house” may receive some publicity over the coming year. This is because certain fulfilment houses must start registering with HMRC. These are not fulfilment houses which are normally part of the direct marketing supply chain however because of the potential for confusion we thought it necessary to make you aware of the scheme.
The fulfilment houses which must register with HMRC are those meeting the following criteria:
a) They provide storage for goods imported from outside the EU;
b) These goods are owned by (or on behalf of) a person established outside the EU;
c) These goods are offered for sale in the UK; and
d) Due to these arrangements buyers do not pay VAT.
The new mandatory registration scheme is to thwart tax avoidance arrangements described by HMRC as follows:
‘Non-EU traders who sell goods…to UK consumers, mainly via online marketplaces, are not always paying the correct VAT and duty to HMRC. These goods are normally shipped to the UK prior to sale and stored in fulfilment houses close to their final delivery point’.
Further information is available at https://www.gov.uk/guidance/fulfilment-house-due-diligence-scheme
