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01 February 2018

UK fulfilment house due diligence scheme for imports commences 1 April 2018

As part of the United Kingdom (UK) Government's targeted campaign to crack down on tax evasion, a new due diligence scheme for UK fulfilment houses handling goods imported from outside the European Union (EU) is due to commence on 1 April 2018.

The draft legislation within the Finance Bill 2017 sets out the requirements for having adequate record-keeping procedures and due diligence in place to comply with the requirements of this new scheme.

Each person that meets the definition of a fulfilment house is required to register as an approved person by 1 April 2019 in order to import goods from outside the EU.

Timeline

  • 1 April 2018 – 30 June 2018: Registration window opens for existing fulfilment businesses
  • 1 July 2018 – 31 March 2019: Verification window for the UK tax authority (HMRC)
  • 1 April 2019: Date that fulfilment houses need to feature on the register to trade as a fulfilment house

Implications

Fulfilment houses will be required to register and maintain adequate records, as well as evidence their due diligence in checking overseas suppliers.

The penalty under this legislation is a criminal conviction for the relevant body which gives rise to imprisonment for a period of up to seven years, a fine or both.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United Kingdom), London

  • Rosie Higgins
    rhiggins@uk.ey.com
  • Bryn Reynolds
    breynolds@uk.ey.com
  • James Bailey
    jbailey2@uk.ey.com

Ernst & Young LLP (United Kingdom), Leeds

  • Penelope Isbecque
    pisbecque@uk.ey.com

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