Guidance: Apply for the Fulfilment House Due Diligence Scheme

If you store goods in the UK for sellers established outside the UK, you may need to apply for the Fulfilment House Due Diligence Scheme.

However, if you store goods in Northern Ireland for sellers established in the EU and Great Britain (England, Scotland and Wales) only, you will not be required to apply for the Fulfilment House Due Diligence Scheme.

You’ll be charged penalties if you do not apply at the right time.

Who must apply

You need to apply if your business stores any goods that:

• were imported from a country outside the UK
• are owned by, or stored on behalf of, someone established outside the UK
• are being offered for sale and have not been sold in the UK before

You’ll also need to apply if the goods are released into free circulation after being stored under a customs regime.

If you store goods in Northern Ireland for sellers established in the EU and Great Britain only, you will not be required to apply for the Fulfilment House Due Diligence Scheme.

You should still apply if you store goods this way, even if you:

• do not think you’re a fulfilment business
• are registered with HMRC for other schemes that require due diligence on customers

Established outside the UK

To work out whether a business is established outside the UK, you should consider where the functions of the business’s central administration take place. This includes where:

• essential management decisions are made
• the registered office is located
• management meetings take place

These types of features indicate a UK establishment exists.

A UK establishment would also exist if the business has a permanent physical presence with the human and technical resources to make or receive taxable supplies in the UK.

Businesses that must not register

Do not apply now if:

• you own the stored goods
• your main business is transporting goods and you need to store those goods temporarily (for example, overnight) as part of your transport services

However, you’ll need to apply when the goods are released into free circulation if you continue to store those goods and they’re still offered for sale.

When to apply

If your business is covered by this scheme you must apply before you begin trading. If not, you:

• will not be allowed to trade as a fulfilment business
• risk a £10,000 penalty and a criminal conviction

If your application is late, HMRC can charge you a penalty of up to £500. This could increase by up to £500 each month your application is late, up to a maximum of £3,000.

New owners of an existing approved business

If you’re purchasing, or have purchased an existing fulfilment business, you should tell HMRC about the change of ownership. An existing approval will not be transferred to you as the new owner, when the business is sold. You’ll need to apply online for the Fulfilment House Due Diligence Scheme by following the process in this guide.

You must tell HMRC about the change of ownership at least 45 days before the date you intend to trade.

Once you have done this, HMRC will help you to apply for Fulfilment House Due Diligence Scheme approval.

You only need to apply for an approval where there has been a complete change of ownership. You do not need one if, for example, a new director is appointed but everything else (including the ownership of the assets, liabilities and obligations) stays in place. However, you must tell HMRC about a significant change, including the appointment of a new director.

You will not be able to trade as a fulfilment business until you’ve been granted approval. If you do, you’ll be treated as trading without approval.

Transitional arrangements

Transitional arrangements apply for those Great Britain businesses who need to register for the Fulfilment House Due Diligence Scheme from the end of the transition period (11pm on 31 December 2020) as a result of the UK’s departure from the EU.

The transitional arrangements only apply to Great Britain fulfilment houses that:

• were carrying on a fulfilment house business before the end of the transition period but were not registered for the Fulfilment House Due Diligence Scheme because all of the goods stored were acquired from within the EU and owned by EU businesses

• start carrying on a fulfilment house business between the end of the transition period and 30 June 2021 and would not have required registration under the Fulfilment House Due Diligence Scheme if it was operating before the end of the transition period (this means that this new fulfilment house business only has customers who are based in an EU member state after the end of the transition period)

• start carrying on a fulfilment house business between 1 July 2021 and 30 September 2021 and has customers who are based outside the UK

What you’ll need

To apply, you need a Government Gateway user ID and password. If you do not have a user ID, you can create one when you apply.

To check your business details we’ll try to match them to an HMRC record that holds your Unique Taxpayer Reference (UTR).

This will be your:

• company UTR as a limited company
• Self Assessment UTR for an ordinary business partnership
• individual Self Assessment UTR as a sole trader

You’ll also need to know:

• the UTR you use for yourself, your company or partnership
• the names of all business directors, company secretaries or partners, and either their National Insurance number, or if they are a non-UK resident, their passport number or national ID number
• approximately how many customers, that your business currently stores goods for, are established outside the UK
• the addresses of any storage premises in the UK used to store goods imported from outside the UK, and whether these premises are operated by third parties
• how long you’ve operated at your main business address
• any previous addresses the business has operated from in the last 3 years
• your business’s company registration number and date of incorporation (if you’re applying as a limited company)
• the business’s UK VAT registration number (if it has one)
• the names, VAT registration numbers or company registration numbers of any company officers, if they’re a company rather than an individual
• Economic Operator Registration and Identification (EORI) number that the business currently uses

Apply

Apply online for the Fulfilment House Due Diligence Scheme.

You cannot use an agent to apply on behalf of your business.

Change or withdraw your application

You can change your application at any time before HMRC has given their decision.

Tell HMRC about a change to your application using the online service. Your application will be treated as being received on the date you tell HMRC about the change.

Withdraw your application using the online service.

What happens next

HMRC will do checks on your application and the people involved in your business.

Check the progress of your application.

HMRC will use the secure messaging facility to:

• make any requests
• tell you if your application has been approved or rejected

You can access the secure messaging facility by signing in.

Your application may be withdrawn if you do not give HMRC more information or permission to inspect your premises when they ask for it.

If your application is rejected, HMRC will tell you why.

If your application is rejected, or your approval is cancelled, you may be able to apply for a temporary approval whilst you seek a review or appeal of that decision.

If your application is approved

If your application is approved, you’ll receive confirmation from HMRC which will include:

• the unique reference number allocated to the approved person
• the date from which you’re approved
• any conditions or restrictions imposed on the approved person
• details of the records you’ll need to keep
• details of the checks you’ll need to do

You’ll also be added to the Fulfilment House Due Diligence Scheme registered businesses list.

When you’re approved, you must: