Introduction:
The Fulfilment House Due Diligence Scheme (FHDDS) is a government tool designed to disrupt and deter the abuse of the tax system, particularly in relation to VAT fraud. The scheme requires fulfilment houses to carry out due diligence checks on their customers, in order to ensure that they are not involved in any fraudulent activity.
The FHDDS was introduced in 2017, following a number of high-profile cases of VAT fraud involving fulfilment houses. In one case, a fulfilment house was used to launder millions of pounds of VAT fraud proceeds. In another case, a fulfilment house was used to sell counterfeit goods on Amazon.
The FHDDS is a complex scheme, and there are a number of different requirements that fulfilment houses must meet. Fulfilment houses must:
- Register with HMRC
- Carry out due diligence checks on their customers
- Keep records of their due diligence checks
- Report any suspicious activity to HMRC
If a fulfilment house fails to comply with the FHDDS, they could face a number of penalties, including fines and imprisonment.
The FHDDS is a significant piece of legislation, and it is important for fulfilment houses to understand their obligations under the scheme. If you are a fulfilment house, you should seek professional advice to ensure that you are complying with the FHDDS.
The Impact of the FHDDS
The FHDDS has had a significant impact on the fulfilment industry. The scheme has made it more difficult for fraudsters to use fulfilment houses to launder money or sell counterfeit goods. As a result, the FHDDS has helped to protect the tax system and consumers.
However, the FHDDS has also had some negative consequences. The scheme has increased the cost of doing business for fulfilment houses. It has also made it more difficult for small businesses to access fulfilment services.
Overall, the FHDDS is a positive development. The scheme has helped to protect the tax system and consumers. However, the scheme has also had some negative consequences for the fulfilment industry.
If You Are Under Investigation
If you are under investigation by HMRC for a breach of the FHDDS, you should seek professional legal advice. A lawyer can help you to understand your rights and options and can represent you in any legal proceedings.
The FHDDS is a complex piece of legislation, and it is important to seek professional advice if you are facing investigation. A lawyer can help you to protect your interests and can ensure that you are treated fairly by HMRC.
Conclusion
In conclusion, the Fulfilment House Due Diligence Scheme (FHDDS) is a complex piece of legislation that has had a significant impact on the fulfilment industry. The scheme has made it more difficult for fraudsters to use fulfilment houses to launder money or sell counterfeit goods. As a result, the FHDDS has helped to protect the tax system and consumers. However, the scheme has also had some negative consequences, such as increasing the cost of doing business for fulfilment houses and making it more difficult for small businesses to access fulfilment services. Overall, the FHDDS is a positive development, but it is important to be aware of the potential consequences of non-compliance.
