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Government ‘wants logistics industry to police internet trade’

[ April 14, 2016   //   ]

Walker Logistics is warning that Government plans to crack down on rogue fulfilment houses from outside the EU will lead to more red tape and could lead to industry being recruited to ‘police’ the online trading market.

Chancellor George Osborne announced plans for a register of fulfilment houses who store and distribute goods on behalf of online retailers in his Spring Budget, one of a range of measures that the Government plans to take to crack down on non-EU online traders that do not pay the correct VAT and duty to HMRC on goods that they store in UK warehouses before selling them to consumers via the web, which is said to be costing the Treasury £1.5bn a year in lost VAT. They also unfairly undercut businesses trading in the UK.

The ‘register’ – which is set to come in to effect in 2018 – will set down ‘fit and proper’ standards that a ‘fulfilment house’ will need to meet in order to operate.

For example, 3PL operators will have to maintain accurate records and be able to provide evidence of due diligence in ensuring that their overseas clients are VAT registered in the UK, or legitimately non-registered.

Bob Montague, managing director of Walker Logistics, commented; “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.”

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