The Fulfilment House Due Diligence Scheme (FHDDS), is part of a package of measures aimed at combatting the abuse of VAT rules by online traders based outside the European Union.

Fulfilment houses that store any goods imported from outside the EU on behalf of others, need to apply for approval from HMRC. These businesses will be required to perform proper due diligence on the goods they fulfil and their overseas clients under the
umbrella of the FHDDS.

Businesses that only store or fulfil goods that they own, or only store or fulfil goods that are not imported from outside the EU, are not required to register for the FHDDS.

The FHDDS opened for online applications on 01 April 2018. The deadline for applications from existing fulfilment businesses falling within the scope of the scheme was 30 June 2018. Businesses that started trading on or after 1 April 2018, needed to apply
on or before 30 September 2018. There are penalties for late applications.

If a business should have registered for the scheme and has not done so, they risk having their goods seized. Unregistered businesses will not be able to continue trading legally from 01 April 2019. Businesses risk a £10,000 penalty and a criminal conviction
if they continue to do so.

Source: New feed