The UK government is calling for the industry to share its views on the proposed Fulfilment House Register, due to come into force in 2018.
Described by the government as a due diligence scheme, and ostensibly intended to crack down on VAT fraud committed by anyone importing goods from non-EU countries, the register risks imposing red tape and restrictions that have a negative impact on the 3PL sector.
Estimates of as much as £1.5bn in unpaid VAT have fuelled the government’s determination to implement regulations on the fulfillment industry, and in his Budget statement in March, Chancellor George Osborne announced the register. Under the scheme, a fulfilment house is defined as “a business that provides services of storage, breaking bulk, unpacking, re-packing and making (or arranging) subsequent delivery to its clients’ customers of goods imported from outside the EU which have been cleared for customs purposes.”
In a consultation document published on the gov.uk website, the government admits there will be an impact on businesses in the sector, who will have to demonstrate compliance with the scheme.
Bob Montague, managing director of Walker Logistics, has spoken out against the register: “Of course the Government must stamp out fraudulent activity that is illegally depriving HMRC of tax revenue.
“However, the proposed ‘fulfilment house register’ throws up a number of issues that are likely to concern the logistics sector. For instance, will it add further unnecessary and unhelpful levels of bureaucracy that will hinder the day-to-day running of businesses operating in a sector already overly burdened by red tape?
“It would also appear that the logistics industry is being recruited to ‘police’ the online trading market – which seems wholly unreasonable.”
The United Kingdom Warehousing Association (UKWA) has said it welcomes the opportunity to engage with the government over the proposed Fulfilment House Register, and is asking its members to send their feedback.
Peter Ward, CEO of UKWA, said: “UKWA and its members welcome any measures that help the Government clamp down on fraudulent activity that is depriving Her Majesty’s Revenue & Customs of considerable revenue.
“As the leading trade association for the UK logistics industry, we are glad to have the opportunity to consult with the Government on this very significant issue. Industry feedback is essential and we would ask any company that is, or has been, involved with the fulfillment of online orders, to take the time to send us their thoughts so that UKWA can put the industry’s concerns to the Treasury.
“We plan to collate the feedback we receive and present a thorough and wide ranging response to the Treasury to ensure that the logistics industry is not penalised by the Government’s plans for a fulfillment house register.”
The consultation period ends on 30 June. UKWA members wishing to voice their thoughts on the issue are advised to do so by the end of this month.