The draft legislation for the fulfilment house due diligence scheme (FHDDS) has been revised to provide a disclosure gateway, permitting HMRC to disclose taxpayer’s information to fulfilment houses, as announced in the spring Budget
The scheme, which was originally announced in Budget 2016, will be included in legislation in Finance Bill 2017.
FHDDS will require all UK fulfilment houses to register with HMRC from 1 April 2018 and must comply with record keeping and due diligence standards.
The consultation on the FHDDS closed on 30 June.
Under the scheme non-compliant overseas traders will be required to appoint a UK tax representative who will be liable for their VAT and/or seeking a security. If these traders fail to comply and online marketplaces do not help stop the abuse occurring, the online marketplaces themselves will become jointly and severally liable for the unpaid VAT.
HMRC will publish a list of registered fulfilment houses so that freight and customs agents, fast parcel operators, and other businesses will know whether the fulfilment house they are consigning goods to or from is registered or not.
The consultation examined the requirement for fulfilment houses who are part of this scheme to perform proper due diligence on the goods that they fulfil, and also on how to deter or prevent deliveries of goods to an unregistered fulfilment house.
The disclosure gateway for fulfilment houses was mentioned in HMRC’s Spring Budget 2017: overview of tax legislation and rates (OOTLAR), which is available here.