Budget 2016: Clearance Houses

Any UK business that fulfils orders of imported goods may be affected by a due diligence scheme introduced within the 2016 budget. This proposed scheme, which would come into effect in 2018 but which is still open to consultation, targets overseas supplies who evade tax through the misdeclaration and undervaluing of goods imported from outside the EU by non-EU suppliers, and the abuse of reliefs that are in place to facilitate trade.

 

The Fulfilment House Due Diligence Scheme (FHDDS) aims to tackle this evasion of tax by introducing new powers that can be used to remove/reject a fulfilment house’s approval to trade if they do not meet the new criteria set out by HMRC in terms of records that must be kept, specifically regarding goods they handle, as well as carrying out diligence checks to help ensure trade undertaken is legitimate.Any business that provides services of storage, breaking bulk, unpacking, re-packing and making (or arranging) subsequent delivery to its clients' customers of goods imported from outside the EU which have been cleared for customs purposes is considered to be a fulfilment house under the new legislation and will be required to register for the scheme, should it be implemented. Businesses that fall within this definition will be required to familiarise themselves with, and register for, the scheme, aswell as maintain accurate records of goods that are handled and provide HMRC with evidence of due diligence undertaken in relation to these goods.

 

Responses can be issued in relation to this consultation before 30 June 2016 and after this date a response document will be published.

 

For further details regarding the proposal of this scheme and what it could mean for your business, including further detail on how the scheme will be implemented, please call our free VAT helpline.

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