Government plans to introduce a fulfilment house register in a bid to clamp down on VAT fraud could see road transport operators facing prosecution if they fail to check they are delivering to and from registered fulfilment centres.
The aim of the legislation is to prevent non-EU online traders avoiding VAT and duty on goods held in UK warehouses, which the government said costs UK taxpayers £1.5bn a year in lost revenue.
Under the proposals, set out in a recently published government consultation document – Fulfilment House Due Diligence Scheme – fulfilment houses storing and distributing goods for online retailers would have to be registered with HMRC.
The government plans to launch the register in 2018. The document also proposes operators be obliged to check that the fulfilment houses they work with are registered and to report those that are not. Failure to do so could result in a number of penalties including fines and seizure of goods.
The consultation document said transport operators “could be central to the solution, having direct contact with both the goods and the premises they deliver to and from. These operators could check the online register and take appropriate action where the fulfilment house is not registered”.
Transport operators that fail to check or fail to report non-compliant fulfilment houses could also be subject to prosecution under the proposed legislation.
The document states: “HMRC wants to explore as part of this scheme whether to introduce sanctions and/or penalties for failure to undertake the necessary online checks or for delivering to an unregistered business.”
These could include civil penalties, detention and seizure of goods and “other options that have a deterrent effect”.
UKWA CEO Peter Ward said: “Members welcome any measures that help the government clamp down on fraudulent activity that is depriving HMRC of considerable revenue.”
However he raised concerns about imposing penalties on logistics operators. “We plan to collate the feedback we receive and present a thorough and wide-ranging response to the Treasury to ensure the logistics industry is not penalised by the government’s plans for a fulfilment house register.”
RHA national policy director Jack Semple said the association is consulting with its members on the proposals.
“We are waiting to hear from our members and will then make our response,” he said.
The deadline for consultation responses is 30 June.
