The term “fulfilment house” was originally just another term for a warehouse, but it is increasingly used to mean storage and distribution facilities provided by a third party to companies based outside the EU selling on-line into the European market.

The UK has introduced a new Fulfilment House Due Diligence Scheme to ensure that overseas businesses selling goods on-line to UK customers pay the correct amount of tax. Businesses that own the goods that they store, or who are just storing goods temporarily as part of a transport service, do not need to register.

Companies will need to register by 1 April 2019 to carry on trading as a fulfilment business or face a £10,000 fine and a criminal conviction.

While the objective is to ensure that such businesses make accurate VAT declarations, the requirement to keep records and carry out checks on overseas customers could have other potential benefits.

At present, various pieces of legislation, including the LVD and WEEE Regulations, impose requirements on various agents in the supply chain. However, for many on-line sales the company running the website on which goods are displayed argues that it is not operating as a supplier (manufacturer) or a distributor (retailer) and that it therefore has no responsibility in law for matters such as the safety of those goods or their ultimate disposal.