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home / New UK measures to prevent VAT fraud from non-EU online sellers
As from 1 April 2018 fulfillment houses will need to register under the ¨Fulfilment House Due Diligence Scheme¨ in the UK. This new online scheme is aimed to set out standards of record keeping and due diligence regarding non-EU suppliers who use fulfillment houses to store, pack and/or deliver their online orders within UK.
The FHDDS is part of the package of measures that the UK government has put in place to prevent VAT fraud from non-EU businesses that sell goods online in the UK.
In principle, all those companies storing goods owned by non-EU seller’s will need to register. The registration will be also required to fulfilment houses that store goods imported into UK.
The ¨Fulfilment House Due Diligence Scheme¨ will require the registration of companies to keep certain records regarding their overseas customer’s data and the stored goods; verify that their non-EU customers are duly registered for VAT purposes in UK and notify to the Tax Authorities any failure detected regarding VAT or customs compliance obligations.
These obligations will enter into force as from 1 January 2019. However, Tax Authorities have already warned that penalties between £500 and £10,000 may apply for late registration or for non-compliance with the above-mentioned obligations.
More detailed information is available on HMRC website.