Fulfilment House Due Diligience Scheme
LOGISTICS
Fulfilment House Due Diligence Scheme Approved
The Fulfilment House Due Diligence Scheme (FHDDS) is a UK government initiative designed to combat tax evasion by overseas sellers who use fulfilment houses to store and distribute goods in the UK.
LTS Global Solutions is a registered fulfilment house under HMRC’s Fulfilment House Due Diligence Scheme, meaning we meet the highest standards of operational and tax compliance for storing goods imported by non-UK sellers.
WHAT IS THE FULFILMENT HOUSE DUE DILIGENCE SCHEME?
The FHDDS is a legal requirement introduced by HMRC under the Finance Act 2016. It applies to businesses storing goods imported from outside the UK or EU that are intended for final sale to UK consumers. It applies to all businesses holding goods in the UK on behalf of overseas clients selling to UK customers.
The scheme aims to prevent VAT fraud by ensuring fulfilment houses work exclusively with compliant overseas sellers. If you store such goods, you must register with the scheme, maintain accurate records and conduct due diligence checks on your clients. LTS is an approved fulfilment house under this scheme, fully compliant with HMRC’s legal requirements.
THE RISKS OF CHOOSING THE WRONG FULFILMENT PARTNER
Partnering with a non-compliant fulfilment house can seriously jeopardise your e-commerce growth. The risks are wide-ranging and costly, including:
- Regulatory exposure – Storing goods in the UK for non-UK companies triggers FHDDS duties. Non-compliance risks fines, daily penalties, and even seized stock.
- VAT complexity – If goods are in the UK at point of sale, overseas sellers must be correctly registered and accounted for.
- Operational blind spots – Inadequate onboarding processes (such as missing VAT checks, origin documents, or import references) and limited WMS visibility can lead to delays and inefficient order fulfilment.
- Margin traps – Last-mile costs and unmanaged returns erode profit and customer trust.
HOW LTS CAN SUPPORT YOUR E-COMMERCE GROWTH
At LTS, we offer a secure and fully compliant gateway into the UK market, enabling your e-commerce business to grow with confidence. Here’s how we support your growth:
- FHDDS-Registered Fulfilment House – We follow audited processes, maintain six years of compliance records, and carry out thorough client due diligence.
- Low-risk onboarding – Our process includes HMRC VAT checks, import documentation capture, product origin verification, and early compliance flagging – ensuring everything is in order before fulfilment begins.
- Expert team – All staff are FHDDS-trained to verify documents, maintain clean records, and escalate issues quickly.
- Compliance by design – At LTS, compliance isn’t just a department, it’s embedded in the way we operate across the entire business.
- End-to-end logistics – Based in the UK’s Golden Triangle (within 4 hours of approximately 90% of the population), we offer warehousing, customs clearance, transport, returns, and last-mile delivery all under one roof.
- Commercial results – Faster processing, fewer exceptions, stronger SLA control, and reduced regulatory risk.
HOW WE HELP WITH FAST, TRANSPARENT, AND COMPLIANT ONBOARDING
Discovery and risk screening
We assess your products, sales channels, logistics flows, and regulatory profile to identify any compliance risks early.
Due diligence
We validate VAT registration, confirm origin and import documentation, and check for high-risk indicators.
Data integration & visibility
Your WMS is configured, reporting and KPIs are aligned, and dashboards go live for full operational transparency.
Operational rehearsal
We run test cycles for goods receipt, picking, labelling, and customs documentation to ensure system and process readiness.
Go-live with guardrails
Your operation launches with exception handling, escalation protocols, and a full audit trail from day one.
WHY CHOOSE LTS GLOBAL SOLUTIONS
Partnering with us allows you to move forward with confidence because we handle compliance, ensuring nothing stands in the way of your growth. Our centrally located Midlands hub enables rapid national reach, ensuring speed and efficiency in your fulfilment operations. You’ll have full control through clear visibility, clean data, and predictable SLAs, allowing you to manage performance with confidence. Most importantly, you’re protected—with fewer penalties, fewer disruptions, and fewer unwelcome surprises.
Our third-party logistics solutions are trusted by international e-commerce businesses seeking a secure, compliant gateway into the UK. Our FHDDS-trained team is proactive and accountable, so you can scale with confidence.
CONTACT US FOR LOGISTICS SOLUTIONS
At LTS Global Solutions, we are proud to be a fully registered fulfilment house under HMRC’s Fulfilment House Due Diligence Scheme. This reflects our commitment to regulatory compliance, operational transparency, and safeguarding the integrity of the UK supply chain. For more information on how we can help, don’t hesitate to contact us via our form below or call us on 0121 753 0080.
Get in touch
If you're interested in working with us, please fill in your details on the contact form and a member of our team will get back to you.
Contact Form
Alternatively, you can contact us on:
Tel: 0121 753 0080
Email: info@ltsglobalsolutions.com
FAQs
Who should register with FHDDS?
Any business that:
Stores goods imported from outside the UK or EU,
On behalf of clients based outside the UK or EU,
Where those goods are offered for sale to UK consumers.
This includes third-party logistics providers, e-commerce fulfilment warehouses, and drop-shipping hubs.
Do you need a fulfilment house as an online retailer?
When deciding whether your business needs a fulfilment house, there are a few factors to consider. Fulfilment services can streamline inventory management and help to reduce shipping costs, which is an essential advantage if you’re selling across multiple locations.
If you’re just starting out with a limited stock, you may not need one right away. However, as your business grows, using a fulfilment house will likely become necessary to maintain scalability and meet increasing customer demand.
What are the key responsibilities of fulfilment businesses?
To meet HMRC requirements, businesses must register and maintain accurate records of overseas clients, including names, addresses, VAT numbers, import entries, and details of goods stored (such as type, quantity, origin, movement, and disposal).
Records must be kept for six years and be available on request. Businesses are also expected to verify VAT numbers, client details, and trading activity, while staying alert to any signs of fraud or suspicious behaviour.
What are the penalties for non-compliance with the FHDDS?
- Fines of up to £10,000 for failure to register
- Daily penalties if the failure continues
- Criminal prosecution for deliberate non-compliance
- Seizure or destruction of goods stored illegally
- Risk of being publicly listed as a non-compliant fulfilment house
