A new scheme has been launched by the Government to help combat VAT evasion by non-EU online traders.
HM Revenue & Customs (HMRC) said the Fulfilment House Due Diligence Scheme “ensures that fulfilment houses play their part in reducing the abuse of VAT”.
The scheme opened for registration on Sunday 1 April.
Any business run from inside the UK, such as a warehouse, that stores goods imported from outside the EU that are owned by, or on behalf of, someone established outside the EU, will need to register by 30 June 2018.
Any business that starts trading between now and 30 June will need to apply by 30 September 2018.
Businesses which trade without registering face a potential penalty of up to £10,000 and a criminal conviction.
The package of measures is being introduced to combat non-EU businesses undercutting British businesses by not charging VAT on products. The practice was particularly widespread on online platforms such as eBay.
Financial Secretary to the Treasury, Mel Stride, said: “Whilst the honest majority pay what they owe, some businesses that sell goods online to UK shoppers are failing to pay the correct amount of VAT.
“This behaviour unfairly undercuts businesses trading in the UK that play by the rules, abuses the trust of buyers, and deprives the government of significant revenue that funds vital public services.
“We are clear that everyone must pay their fair share of tax, and tackling tax evasion in all its forms is a top priority for the government.”
For more information about the new scheme, or about VAT in general, please get in touch.