If your due diligence still involves the collection of paper and no further checks or questioning of your customers and suppliers, you are at significant risk of losing HMRC licence approvals.
Just collecting paperwork, e.g. Certificates of incorporation, Directors Passports and Utility bills is not sufficient.
The days where companies who wanted to trade could just swap files of paper and say they have done due diligence are gone.
Is My Current Due Diligence Good Enough?
If you want to hold and retain an AWRS, WOWGR or Alcohol linked licence FITTED would apply and there are clear guidelines for MLR due diligence. Modern Slavery also requires appropriate checks to be carried out and needs to be considered carefully given the potential risks for failures in any supply chain that may include labour. The level of required check is now significantly higher than just 3 years ago. At a high level companies must be prepared to have:
- Evidenced checks undertaken on proposed trading partners
- Visits to premises
- Checklists of documentation received and verified
- Records of questions asked
- Risk assessments made and filed
- Continuous monitoring undertaken whilst trading takes place.
Failure to comply with due diligence requirements and to have written evidence of your checks will likely result in HMRC deeming the business non-compliant and this constitutes reasonable cause to deny or revoke an approval. The lack of checks may also result in a finding that individuals involved in the company are not ‘fit and proper’.
Just because a business is big doesn’t mean due diligence does not apply. There is no defined list of checks that must be carried out but the checks must reflect the risks posed by the trading relationship.
Our team can assist you if you have concerns about the quality of your due diligence checks for your current business or for a future business opportunities. If you would like to have a confidential discussion with a member of our team, please either make an Online Enquiry or call us directly on01908 414990 and we will be pleased to help you.
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