FHDDS51405 - Penalties, sanctions and offences: penalties – policy: Trading without approval - What is trading without approval?

(Finance Act (No.2) 2017, section 53)

Essentially, this refers to any person carrying on an imported goods fulfilment business, as explained at FHDDS31200 and FHDDS31800 without being approved for registration under FHDDS.

A Person (P) could be any one of the following:

· an individual

· a company

· a partner

· a partnership

· a limited liability partnership

If a new business:

· applies for approval but has started trading after 1st April 2019 before receiving an approval decision from us, or

· starts trading and does not apply

they can be liable to criminal prosecution or to a penalty for trading without approval.

Businesses that are refused approval and continue to trade regardless of that decision are also trading without approval and they can be notified of what action HMRC might take by referring them to ’Apply for the Fulfilment House Due Diligence Scheme’ (also known as FH1).

A person who trades without approval will not be liable to a penalty for the contravention if they have a reasonable excuse, see CH71500 for further details and an example of what could constitutes a reasonable excuse.