Finance (No. 2) Act 2017

PART 3 U.K. Fulfilment businesses

48 Carrying on [F1 an imported goods] fulfilment business U.K.

(1) For the purposes of this Part a person carries on [F2 an imported goods] fulfilment business if the person, by way of business—

(a) stores [F3 imported goods] which are owned by a person who is not [F4 UK-established], or

(b) stores [F5 imported goods] on behalf of a person who is not [F6 UK-established],

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 [F7 an imported goods] fulfilment business if the person's activities within subsection (1) are incidental to the carriage of the goods.

[F8 (4) Goods are “imported goods” if they have been imported into the United Kingdom for the purposes of VATA 1994 (as to which, see section 15 [F9 and paragraph 1 of Schedule 9ZB]).

[F10 (4A) But goods that are treated as imported for the purposes of VATA 1994 as a result of paragraph 3 of Schedule 9ZB are not imported goods for the purposes of this Part.]

(5) A person is “UK-established” if the person's business establishment is in the United Kingdom as determined for the purposes of section 9 of VATA 1994.]

Textual Amendments

F1 Words in s. 48 heading substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 123(5) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F2 Words in s. 48(1) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 123(2)(a) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F3 Words in s. 48(1)(a) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 123(2)(b)(i) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F4 Words in s. 48(1)(a) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 123(2)(b)(ii) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F5 Words in s. 48(1)(b) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 123(2)(c)(i) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F6 Words in s. 48(1)(b) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 123(2)(c)(ii) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F7 Words in s. 48(3) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 123(3) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F8 S. 48(4)(5) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 123(4) (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F9 Words in s. 48(4) inserted (17.12.2020 for specified purposes, 31.12.2020 in so far as not already in force) by Taxation (Post-transition Period) Act 2020 (c. 26), s. 11(1)(e), Sch. 2 para. 9(a) (with Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 9

F10 S. 48(4A) inserted (17.12.2020 for specified purposes, 31.12.2020 in so far as not already in force) by Taxation (Post-transition Period) Act 2020 (c. 26), s. 11(1)(e), Sch. 2 para. 9(b) (with Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 9

Commencement Information

I1 Pt. 3: s. 48 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I2 S. 48 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)

49 Requirement for approval U.K.

(1) A person may not carry on [F11 an imported 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 [F11 an imported 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 [F11 an imported 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 [F12 an imported goods] fulfilment business.

Textual Amendments

F11 Words in s. 49(1)-(3) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 124 (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F12 Words in s. 49(5) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 124 (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

Commencement Information

I3 Pt. 3: s. 49 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I4 S. 49 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)

50 Register of approved persons U.K.

(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 [F13 an imported 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.

Textual Amendments

F13 Words in s. 50(3) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 125 (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

Commencement Information

I5 Pt. 3: s. 50 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I6 S. 50 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)

51 Regulations relating to approval, registration etc. U.K.

(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 [F14 an imported 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.

Textual Amendments

F14 Words in s. 51(1)(d) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 126 (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

Commencement Information

I7 Pt. 3: s. 51 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I8 S. 51 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)

52 Disclosure of information by HMRC U.K.

(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.

Commencement Information

I9 Pt. 3: s. 52 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I10 S. 52 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)

53 Offence U.K.

(1) A person who—

(a) carries on [F15 an imported 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 [F16 an imported 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 [F17 the general limit in a magistrates’ court], 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 [F18 2 May 2022] the reference in subsection (4)(a) to [F19 the general limit in a magistrates’ court] is to be read as a reference to 6 months.

Textual Amendments

F15 Words in s. 53(1)(a) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 127 (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F16 Words in s. 53(2)(a) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 127 (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F17 Words in s. 53(4)(a) substituted (7.2.2023 at 12.00 p.m.) by The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149), regs. 1(2), 2(1), Sch. Pt. 1

F18 Words in s. 53(6) substituted (28.4.2022) by The Criminal Justice Act 2003 (Commencement No. 33) and Sentencing Act 2020 (Commencement No. 2) Regulations 2022 (S.I. 2022/500), regs. 1(2), 5(1), Sch. Pt. 1

F19 Words in s. 53(6) substituted (7.2.2023 at 12.00 p.m.) by The Judicial Review and Courts Act 2022 (Magistrates’ Court Sentencing Powers) Regulations 2023 (S.I. 2023/149), regs. 1(2), 2(1), Sch. Pt. 1

Modifications etc. (not altering text)

C1 Ss. 53-55 restricted (31.12.2020) by The Value Added Tax (Miscellaneous Amendments and Transitional Provisions) (EU Exit) Regulations 2019 (S.I. 2019/1214), regs. 1, 15; S.I. 2020/1641, reg. 2, Sch.

C2 Ss. 53-55 restricted (31.12.2020) by The Value Added Tax (Miscellaneous Amendments, Revocation and Transitional Provisions) (EU Exit) Regulations 2019 (S.I. 2019/513), regs. 1, 14; S.I. 2020/1641, reg. 2, Sch.

Commencement Information

I11 Pt. 3: s. 53 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I12 S. 53 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)

54 Forfeiture U.K.

(1) If a person—

(a) carries on [F20 an imported 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 [F21 an imported goods] fulfilment business by the person.

Textual Amendments

F20 Words in s. 54(1)(a) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 128 (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

F21 Words in s. 54(2)(b) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 128 (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

Modifications etc. (not altering text)

C1 Ss. 53-55 restricted (31.12.2020) by The Value Added Tax (Miscellaneous Amendments and Transitional Provisions) (EU Exit) Regulations 2019 (S.I. 2019/1214), regs. 1, 15; S.I. 2020/1641, reg. 2, Sch.

C2 Ss. 53-55 restricted (31.12.2020) by The Value Added Tax (Miscellaneous Amendments, Revocation and Transitional Provisions) (EU Exit) Regulations 2019 (S.I. 2019/513), regs. 1, 14; S.I. 2020/1641, reg. 2, Sch.

Commencement Information

I13 Pt. 3: s. 54 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I14 S. 54 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)

55 Penalties U.K.

(1) Schedule 13 provides for a penalty to be payable by a person who carries on [F22 an imported 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.

Textual Amendments

F22 Words in s. 55(1) substituted (31.12.2020) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(3), Sch. 8 para. 129 (with savings and transitional provisions in S.I. 2019/105 (as amended by S.I. 2020/1495, regs. 1(2), 21), S.I. 2020/1545, Pt. 4 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(b) (with reg. 7)

Modifications etc. (not altering text)

C1 Ss. 53-55 restricted (31.12.2020) by The Value Added Tax (Miscellaneous Amendments and Transitional Provisions) (EU Exit) Regulations 2019 (S.I. 2019/1214), regs. 1, 15; S.I. 2020/1641, reg. 2, Sch.

C2 Ss. 53-55 restricted (31.12.2020) by The Value Added Tax (Miscellaneous Amendments, Revocation and Transitional Provisions) (EU Exit) Regulations 2019 (S.I. 2019/513), regs. 1, 14; S.I. 2020/1641, reg. 2, Sch.

Commencement Information

I15 Pt. 3: s. 55 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I16 S. 55 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)

56 Appeals U.K.

(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.”

Commencement Information

I17 Pt. 3: s. 56 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I18 S. 56 in force at 1.4.2018 for the purposes of the amendments made by that section by S.I. 2018/298, reg. 2(2)

57 Regulations U.K.

(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).

Commencement Information

I19 Pt. 3: s. 57 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I20 S. 57 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)

58 Interpretation U.K.

(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.

Commencement Information

I21 Pt. 3: s. 58 in force for at Royal Assent for specified purposes, see s. 59(1)(a)

I22 S. 58 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)

59 Commencement U.K.

(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.

Commencement Information

I23 Pt. 3: s. 59 in force at Royal Assent for specified purposes, see s. 59(1)(a)

I24 S. 59 in force at 1.4.2019 in so far as not already in force by S.I. 2018/298, reg. 2(1)