The Fulfilment Businesses Regulations 2018

EXPLANATORY NOTE

(This note is not part of the Regulations)

Section 49(1) of the Finance (No. 2) Act 2017 provides that a person may not carry on a third country goods fulfilment business otherwise than in accordance with an approval given by the Commissioners for Her Majesty’s Revenue and Customs (“the Commissioners”). A person carries on a third country goods fulfilment business if they meet the test set out in section 48 of the Finance (No. 2) Act 2017.

The Regulations are in five Parts.

Part 1 of the Regulations contains introductory provisions, including provisions relating to communications with the Commissioners.

Part 2 of the Regulations deals with the approval process, including how and when to make an application for approval (regulation 4) and how the Commissioners will respond to an application (regulation 6). Part 2 also covers the procedure for variation and revocation of an approval.

Part 3 of the Regulations imposes obligations on approved persons.

The obligations imposed are that an approved person must:

• not start a new third country goods fulfilment business with a person, or continue an existing third country goods fulfilment business with a customer, if the approved person knows or has reasonable grounds to suspect is not meeting a VAT or customs duty obligation; the approved person must also notify the Commissioners when they become aware or suspect that a customer is not meeting those obligations (regulation 8),

• give notice to all third country customers (regulation 9),

• conduct due diligence checks on third country customers and maintain records of those checks (regulation 10),

• verify a third country customer’s VAT registration number or VAT exemption reference number and notify the Commissioners of discrepancies (regulation 11),

• notify the Commissioners of changes in registered details (regulation 12), and

• tell the Commissioners when they cease to carry on a third country goods fulfilment business (regulation 13).

Part 4 of the Regulations is concerned with penalties for making late applications for approval and failing to comply with any condition or restriction to which an approval is subject and the obligations imposed under Part 3.

Part 5 of the Regulations revokes the Fulfilment Businesses (Approval Scheme) Regulations 2018.

A Tax Information and Impact Note covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.