The UK government has confirmed that from 30 June 2018, in an effort to prevent VAT fraud all UK-based businesses that are involved with fulfilling orders of imported goods for third party businesses will need to apply to join a new approved fulfilment house register.
The new scheme will require all affected businesses to register if they store goods that are:
- Imported from a country outside the EU
- Owned by, or stored on behalf of, someone established outside the EU
- Offered for sale and haven’t been sold in the UK before
- If they store any of the above mentioned goods for longer than 24 hours.
This could mean that businesses who only import the goods or transport the imported goods to and from fulfilment houses are also affected.
Any affected businesses will need to apply to HMRC to join the new scheme and once accepted they will be required to perform certain checks on their foreign customers in order to keep a register. These checks include verifying the following details:
- Names and contact details
- VAT registration numbers
- The type and quantities of goods stored in their warehouse
- Import entry numbers
- The delivery addresses.
In addition, the businesses will also need to supply notices to their customers in order to explain their VAT and duty obligations in the UK and if it is found that these are not being followed, they must notify HMRC and cancel the service they provide to the customer if instructed to do so by HMRC.
Any business affected that does not apply to join the fulfilment house register or does not follow the rule once they have joined, will face penalties ranging from £500 to £3,000.