Fulfilment House Due Diligence Scheme

The Fulfilment House Due Diligence Scheme (FHDDS) is a new regulatory requirement introduced by the UK government, effective from 1 April 2024. The scheme is designed to ensure that UK-based businesses storing, handling, or shipping goods on behalf of overseas sellers comply with UK tax, VAT, and customs regulations.

FHDDS applies to any UK business that stores, handles, or ships goods on behalf of overseas sellers, particularly in the realm of cross-border e-commerce. This includes businesses serving as fulfilment houses for online sellers using platforms like Amazon or eBay, as well as those involved in warehousing and distribution services for foreign companies. Additionally, the scheme covers businesses offering services such as returns management or storage for goods from overseas, including warehouses in countries like China.

If your business is responsible for storing or shipping goods on behalf of non-UK sellers to UK customers, it is likely that you will need to register for the scheme to ensure full compliance with UK tax and customs regulations.

What We Can Do for You

While businesses must apply for the Fulfilment House Due Diligence Scheme directly with HMRC, our role is pivotal in helping you meet the scheme’s requirements and avoid potential penalties. Here’s how we add value:

1. Verification and Due Diligence Support:

• Client Verification: As a regulated UK agent, we can help ensure that your clients—particularly overseas sellers—meet the necessary tax compliance standards. We assist in verifying their identity and checking that their goods and operations comply with UK VAT and customs rules.
• Foreign Entity Verification: For clients based outside the UK, we have the expertise to conduct thorough identity and business verifications, which is often a critical part of the due diligence process.

2. Navigating Complex Tax and VAT Requirements:

• VAT Compliance: Our team is equipped to guide you through the complexities of VAT regulations, ensuring that your operations are fully aligned with UK tax laws under the new scheme.
• Avoiding Tax Evasion Risks: We help you identify any risks associated with non-compliant overseas sellers, ensuring that you do not become inadvertently involved in VAT fraud or other customs violations.

3. Guidance on Application Process:

• Assisting with Documentation: While we cannot submit the application for you, we can help you prepare the necessary documents and ensure that your internal due diligence systems are up to standard.
• Accountant Certification: Should HMRC request additional documentation or assurance for records, we can assist in providing the necessary support and guidance to ensure a smooth process.

4. Ongoing Compliance and Renewal:

• Annual Registration: We provide reminders and ongoing support to ensure your registration is renewed annually, helping you avoid penalties or interruptions in your business operations.
• Regulatory Updates: As the regulatory landscape evolves, we stay on top of changes to ensure your business remains compliant.

Key Details About the Scheme

• Who Needs to Apply: UK-based businesses storing, handling, and shipping goods on behalf of overseas sellers.
• When to Apply: By 1 April 2024, or before you begin any fulfilment house operations.
• How to Apply: The application is completed directly on HMRC’s website, but we can assist in ensuring your due diligence processes meet the necessary requirements.

If it’s crucial for you, it’s crucial for us

The Fulfilment House Due Diligence Scheme is not just about compliance; it’s about protecting your business from the risks of tax fraud, penalties, and reputational damage. By working with us, you can ensure that your fulfilment house operations are fully compliant, and that you have the necessary verification systems in place to avoid potential liabilities.

With our expertise in VAT and cross-border trade regulations, we are well-positioned to help you navigate the Fulfilment House Due Diligence Scheme and ensure your application and compliance of business to the new regulation.

As a trusted UK-regulated agents for overseas entities, we are well-positioned to support you in navigating the compliance process smoothly and effectively.

***Contact us to learn more.

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