On 23 October 2017, HMRC published draft regulations concerning the fulfilment house due diligence scheme.

The scheme is to be introduced with effect from 1 April 2018 (other than the provisions concerning obligations and penalties which will come into force on 1 April 2019), by measures included in the Finance (No. 2) Bill 2017 to combat tax evasion by overseas suppliers selling goods through online market places. It applies to businesses that store any goods imported from outside the EU for, or on behalf of, someone outside the EU.

Fulfilment houses will be required to register and submit to specified record keeping and due diligence.

The draft legislation sets out the approval process, obligations and restrictions and the penalties which will apply for failure to comply with the scheme.

The scheme will be of particular interest to businesses concerned with warehousing, storage, fulfilment, importing goods as well as those involved in e-commerce.

HMRC has invited comments on the draft regulations by 15 December 2017 and any comments can be emailed to: indirecttax.projectteam@hmrc.gsi.gov.uk. Emails should be marked ‘FHDDS’.

A copy of the draft legislation is available to view here.