Finance (No. 2) Act 2017

PART 3 Fulfilment businesses

48 Carrying on a third country goods fulfilment business

(1) For the purposes of this Part a person carries on a third country goods fulfilment business if the person, by way of business—

(a) stores third country goods which are owned by a person who is not established in a Member State, or

(b) stores third country goods on behalf of a person who is not established in a Member State,

at a time when the conditions in subsection (2) are met in relation to the goods.

(2) The conditions are that—

(a) there has been no supply of the goods in the United Kingdom for the purposes of VATA 1994, and

(b) the goods are being offered for sale in the United Kingdom or elsewhere.

(3) But a person does not carry on a third country goods fulfilment business if the person’s activities within subsection (1) are incidental to the carriage of the goods.

(4) Goods are “third country” goods if they have been imported from a place outside the Member States within the meaning of section 15 of VATA 1994.

(5) Whether a person is established in a Member State is to be determined in accordance with Article 10 of Council Implementing Regulation (EU) No 282/2011 of 15 March 2011 laying down implementing measures for Directive 2006/112/EC on the common system of value added tax.

49 Requirement for approval

(1) A person may not carry on a third country goods fulfilment business otherwise than in accordance with an approval given by the Commissioners under this section.

(2) The Commissioners may approve a person to carry on a third country goods fulfilment business only if they are satisfied that the person is a fit and proper person to carry on the business.

(3) The Commissioners may approve a person to carry on a third country goods fulfilment business for such periods and subject to such conditions or restrictions as they may think fit or as they may by regulations made by them prescribe.

(4) The Commissioners may at any time for reasonable cause vary the terms of, or revoke, an approval under this section.

(5) In this Part “approved person” means a person approved under this section to carry on a third country goods fulfilment business.

50 Register of approved persons

(1) The Commissioners must maintain a register of approved persons.

(2) The register is to contain such information relating to approved persons as the Commissioners consider appropriate.

(3) The Commissioners may make publicly available such information contained in the register as they consider necessary to enable those who deal with a person who carries on a third country goods fulfilment business to determine whether the person in question is an approved person in relation to that activity.

(4) The information may be made available by such means (including the internet) as the Commissioners consider appropriate.

51 Regulations relating to approval, registration etc.

(1) The Commissioners may by regulations make provision—

(a) regulating the approval and registration of persons under this Part,

(b) regulating the variation or revocation of any such approval or registration, or of any condition or restriction to which such an approval or registration is subject,

(c) about the register maintained under section 50,

(d) regulating the carrying on of a third country goods fulfilment business, and

(e) imposing obligations on approved persons.

(2) The regulations may, in particular, make provision—

(a) requiring applications, and other communications with the Commissioners, to be made electronically;

(b) as to the procedure for the approval and registration of bodies corporate which are members of the same group;

(c) requiring approved persons to keep and make available for inspection such records as may be prescribed by or under the regulations.

52 Disclosure of information by HMRC

(1) The Commissioners may disclose to an approved person information held by Her Majesty’s Revenue and Customs in connection with a function of Her Majesty’s Revenue and Customs, but only for the purpose mentioned in subsection (2).

(2) The purpose is to assist the approved person in complying with obligations imposed on that person by virtue of section 51.

(3) An approved person to whom information is disclosed under subsection (1)—

(a) may use the information only for the purpose of complying with obligations imposed on that person by virtue of section 51, and

(b) may not further disclose the information except with the consent of the Commissioners.

(4) Section 19 of the Commissioners for Revenue and Customs Act 2005 (offence) applies to a disclosure in contravention of subsection (3)(b) as it applies to a disclosure, in contravention of section 20(9) of that Act, of revenue and customs information relating to a person whose identity is specified in the disclosure or can be deduced from it.

53 Offence

(1) A person who—

(a) carries on a third country goods fulfilment business, and

(b) is not an approved person,

commits an offence.

(2) In proceedings for an offence under subsection (1) it is a defence to show that the person did not know, and had no reasonable grounds to suspect, that the person—

(a) was carrying on a third country goods fulfilment business, or

(b) was not an approved person.

(3) A person is taken to have shown the fact mentioned in subsection (2) if—

(a) sufficient evidence of that fact is adduced to raise an issue with respect to it, and

(b) the contrary is not proved beyond reasonable doubt.

(4) A person guilty of an offence under this section is liable on summary conviction—

(a) in England and Wales, to imprisonment for a term not exceeding 12 months, or a fine, or both;

(b) in Scotland, to imprisonment for a term not exceeding 12 months, or a fine not exceeding the statutory maximum, or both;

(c) in Northern Ireland, to imprisonment for a term not exceeding 6 months, or a fine not exceeding the statutory maximum, or both.

(5) A person guilty of an offence under this section is liable on conviction on indictment to—

(a) imprisonment for a period not exceeding 7 years,

(b) a fine, or

(c) both.

(6) In relation to an offence committed before the commencement of section 154(1) of the Criminal Justice Act 2003 the reference in subsection (4)(a) to 12 months is to be read as a reference to 6 months.

54 Forfeiture

(1) If a person—

(a) carries on a third country goods fulfilment business, and

(b) is not an approved person,

any goods within subsection (2) are liable to forfeiture under CEMA 1979.

(2) Goods are within this subsection if—

(a) they are stored by the person, and

(b) their storage by the person constitutes, or has constituted, the carrying on of a third country goods fulfilment business by the person.

55 Penalties

(1) Schedule 13 provides for a penalty to be payable by a person who carries on a third country goods fulfilment business and is not an approved person.

(2) The Commissioners may make regulations (“penalty regulations”) imposing a penalty for the contravention of—

(a) any condition or restriction imposed under this Part;

(b) regulations under this Part.

(3) The amount of a penalty imposed by the penalty regulations is to be specified in the regulations, but must not exceed £3,000.

(4) The penalty regulations may make provision for the assessment and recovery of a penalty imposed by the regulations.

(5) The Commissioners may by regulations make provision for corporate bodies which are members of the same group to be jointly and severally liable for any penalties imposed under—

(a) Schedule 13;

(b) penalty regulations.

56 Appeals

(1) FA 1994 is amended as follows.

(2) In section 13A(2) (customs and excise reviews and appeals: relevant decisions) after paragraph (gb) insert—

“(gc) any decision by HMRC that a person is liable to a penalty, or as to the amount of a person’s liability, under—

(i) regulations under section 55 of the Finance (No. 2) Act 2017, or

(ii) Schedule 13 to that Act;”.

(3) In Schedule 5 to that Act (decisions subject to review and appeal) after paragraph 9A insert—

“The Finance (No. 2) Act 2017

9B Any decision for the purposes of Part 3 of the Finance (No. 2) Act 2017 (third country goods fulfilment businesses) as to—

(a) whether or not, and in which respects, any person is to be, or to continue to be, approved and registered, or

(b) the conditions or restrictions subject to which any person is approved and registered.”

57 Regulations

(1) Regulations under this Part may—

(a) make provision which applies generally or only for specified cases or purposes;

(b) make different provision for different cases or purposes;

(c) include incidental, consequential, transitional or transitory provision;

(d) confer a discretion on the Commissioners;

(e) make provision by reference to a notice to be published by the Commissioners.

(2) Regulations under this Part are to be made by statutory instrument.

(3) A statutory instrument containing regulations under this Part is subject to annulment in pursuance of a resolution of the House of Commons.

(4) This section does not apply to regulations under section 59 (commencement).

58 Interpretation

(1) In this Part—

• “approved person” has the meaning given by section 49(5);

• “the Commissioners” means the Commissioners for Her Majesty’s Revenue and Customs.

(2) For the purposes of this Part two or more bodies corporate are members of a group if—

(a) one of them controls each of the others,

(b) one person (whether a body corporate or an individual) controls all of them, or

(c) two or more individuals carrying on a business in partnership control all of them.

(3) A body corporate is to be taken to control another body corporate if—

(a) it is empowered by or under legislation to control that body’s activities, or

(b) it is that body’s holding company within the meaning of section 1159 of, and Schedule 6 to, the Companies Act 2006.

(4) An individual or individuals are to be taken to control a body corporate if the individual or individuals (were the individual or individuals a company) would be that body’s holding company within the meaning of section 1159 of, and Schedule 6 to, the Companies Act 2006.

59 Commencement

(1) This Part comes into force—

(a) so far as it confers powers to make regulations, on the day on which this Act is passed, and

(b) for all other purposes, on such day as the Commissioners may by regulations made by statutory instrument appoint.

(2) Regulations under subsection (1)(b) may appoint different days for different purposes.