Infrographic: do you need to apply for the Fulfilment House Due Diligence Scheme?
Tomorrow is the deadline for UK-based e-commerce logistics providers to submit their applications for the ...
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Unknown to some, the first deadline for applications to register for the UK’s Fulfilment House Due Diligence Scheme (FHDDS) is fast approaching – and businesses have to know whether it will apply to them.
If you have been providing the type of fulfilment service covered by FHDDS as at 31 March this year then you have until 30 June to submit your online application and avoid a financial penalty.
FHDDS applies to businesses which store goods brought in from outside the EU, which are owned by, or are stored on behalf of, a person or business based outside the EU, at a time when the goods are being offered for sale in the UK and elsewhere, and where the goods have not previously been sold in the UK.
Late applications will be accepted by HMRC, however a penalty of £500 will be charged for each month that the application is late, up to a maximum of £3,000. Only in truly exceptional circumstances will HMRC consider reducing the penalty.
A late application could also place it at risk of not being processed in time for your business to be registered by 1 April 2019. From that date onwards, providing this type of fulfilment service whilst unregistered will be a criminal offence carrying a maximum sentence of seven years imprisonment or you could be hit with a £10,000 civil penalty.
There is a later deadline of 30 September if you commenced providing the fulfilment service between 1 April and 30 June this year. Fulfilment businesses which start trading from 1 July onwards will need to apply by 1 October or on the date they start trading, whichever is the latter.
With the current level of applications falling well short of HMRC’s conservative estimate of the number of businesses which they believe will be caught by FHDDS and with an expectation of businesses looking at all of this at the eleventh hour, HMRC and UKWA hosted a briefing on Thursday 21 June, at which a number of points of relevance to the application process were confirmed:
At this late stage, given the potential implications for businesses that file a late application, HMRC’s recommendation of ‘if in doubt, apply to register’ appears eminently sensible in the circumstances. With that ‘holding position’ in place, businesses can then either take prompt professional advice, if they are unable to do so by the 30 June, and then decide whether to press ahead or withdraw, or they can await the arrival and advice of HMRC before making that decision. The online application is straightforward and there is no application fee to be paid.
This is a guest post by transport and logistics law specialist Howard Catherall, of Gotelee Solicitors. Mr Catherall can be contacted at [email protected] or call 01473 298167.
Comment on this article
Stephen Brown
June 22, 2018 at 6:08 pmSimilarly to GDPR, it seems that there are a lot of lawyers clamouring to scare businesses into spending money unnecessarily. There is absolutely no need for professional advice on this matter; go online, spend 20 minutes registering, then remember to only deal with clients who are VAT compliant. Simple. No need for a lawyer, especially if hey try to sell you a smartphone application that doesn’t assist in any way!