Make and Supply Approved for the UK FHDDS Scheme: Why Compliance Matters for Us (and You)

We’re pleased to announce our official approval under the UK’s Fulfilment House Due Diligence Scheme (FHDDS), marking a significant milestone in our commitment to regulatory compliance and operational excellence.

This approval isn’t just a badge of honour, it’s a fundamental requirement for any legitimate fulfilment business operating in the UK today. Here’s why this matters for our company and, more importantly, for the businesses we serve.

What is the FHDDS?

The Fulfilment House Due Diligence Scheme became mandatory on 1 April 2024, introduced by HMRC under the Finance Act 2016. This regulatory framework targets UK businesses that store goods imported from outside the UK on behalf of non-UK sellers who then sell to UK customers.

The scheme exists primarily to combat VAT fraud and ensure that overseas sellers meet their UK tax obligations. With over 60% of typical fulfilment house clients based offshore, robust due diligence has become essential for legitimate operations.

FHDDS requires registered businesses to:

• Conduct regular checks on clients to ensure VAT registration
• Maintain accurate records of stored and dispatched goods
• Report suspicious activities or non-compliance to HMRC
• Implement comprehensive due diligence procedures

Why Compliance Isn’t Optional

The consequences of operating without FHDDS approval are severe and immediate. Any business storing imported goods for overseas sellers without proper registration faces:

Financial Penalties

• £10,000 penalty for trading without approval
• Potential criminal conviction
• Late application penalties up to £500 per month (capped at £3,000)
• Risk of being prohibited from operating as a fulfilment business

Operational Restrictions
HMRC can effectively shut down non-compliant operations, leaving businesses unable to serve their clients and potentially facing legal action from affected parties.

Reputational Damage
Non-compliance signals poor governance and risk management, damaging relationships with clients, suppliers, and regulatory authorities.

What Our FHDDS Approval Means for You

Our approval under the FHDDS provides several critical advantages for businesses considering our warehouse services:

Legal Protection

When you work with Make and Supply, you’re partnering with a fully compliant operation. This protects your business from the risks associated with using non-registered fulfilment providers and ensures your supply chain meets all regulatory requirements.

Enhanced Due Diligence

We maintain comprehensive due diligence procedures that protect both our business and yours. Our processes include:

• Verification of client VAT registration status
• Regular monitoring of compliance requirements
• Detailed record-keeping of all transactions
• Proactive reporting of any compliance concerns

Supply Chain Integrity

Our FHDDS compliance demonstrates our commitment to maintaining a transparent, accountable supply chain. This is particularly valuable for businesses importing goods from overseas or working with international suppliers.

Peace of Mind

With FHDDS approval, you can focus on growing your business knowing that your fulfilment operations meet all current regulatory standards. This reduces compliance-related stress and allows you to concentrate on what you do best.

Our Commitment to Regulatory Excellence

Achieving FHDDS approval required significant investment in systems, processes, and training. We’ve implemented:

Robust Client Verification Processes
Every new client undergoes comprehensive verification to ensure VAT compliance and legitimate business operations. This includes documentation review, registration verification, and ongoing monitoring.

Advanced Record-Keeping Systems
We maintain detailed records of all goods received, stored, and dispatched, with full traceability throughout the supply chain. These systems ensure we can provide complete audit trails when required.

Regular Compliance Reviews
Our compliance framework includes regular internal audits and reviews to ensure we maintain the highest standards. We continuously update our procedures to reflect regulatory changes and best practices.

Staff Training and Development
All team members receive comprehensive training on FHDDS requirements and compliance procedures. This ensures consistent application of our standards across all operations.

The Broader Impact on Warehouse Services

The introduction of FHDDS represents a significant shift in the warehouse and fulfilment industry. It’s separating legitimate operators from those cutting corners or operating in regulatory grey areas.

For businesses seeking fulfilment services, this creates both challenges and opportunities:

Challenges:

• Reduced pool of compliant providers
• Potential cost increases as providers invest in compliance
• More complex onboarding procedures

Opportunities:

• Improved supply chain security
• Better protection against VAT fraud
• Enhanced trust in fulfilment partnerships
• Clearer regulatory framework

Looking Forward

Our FHDDS approval is more than a regulatory requirement, it’s a commitment to operating at the highest professional standards. We view compliance not as a burden but as a competitive advantage that protects our clients and strengthens our industry.

The regulatory landscape will continue to evolve, and we’re committed to staying ahead of these changes. Our investment in compliance infrastructure positions us to adapt quickly to future requirements whilst maintaining uninterrupted service for our clients.

How This Affects Our Service Delivery

FHDDS compliance enhances rather than restricts our service capabilities. Our robust systems and processes enable us to:

• Provide faster, more accurate reporting
• Offer enhanced visibility into supply chain operations
• Deliver comprehensive compliance documentation
• Support client audit and reporting requirements

 

Working with a Compliant Partner

When evaluating fulfilment providers, FHDDS compliance should be a non-negotiable requirement. Working with non-compliant providers exposes your business to significant risks including:

• Disrupted operations if providers are shut down
• Potential VAT complications
• Regulatory scrutiny of your supply chain
• Reputational damage from association with non-compliant operations

Our FHDDS approval provides assurance that your fulfilment operations meet current regulatory standards and will continue to do so as requirements evolve.

Contact Information

 

Our team is ready to discuss how our compliant operations can support your business requirements whilst maintaining the highest standards of regulatory adherence.

The warehouse services landscape has changed significantly with the introduction of FHDDS, but this change strengthens the industry by establishing clear standards and protecting legitimate businesses. Our approval under this scheme demonstrates our commitment to these standards and our readiness to serve businesses requiring compliant fulfilment solutions.