VPDS126000 | Vaping Products Duty and Vaping Duty Stamps: Returns: Fit and proper considerations

All applicants seeking approval under the VPPDSC Regs 26 must undergo a comprehensive fit and proper risk assessment. This assessment applies not only to the legal entity but also to all individuals with significant influence over the business, including:

• partners

• directors

• beneficial owners

• other key persons involved in the management or control of the business

Before granting approval, you must be satisfied that the following criteria are met:

1. No Evidence of Illicit Trading - There must be no indication that the business poses a serious threat to the revenue, such as through.

   • HMRC assessments

   • seizures

   • penalties

   • other enforcement actions

2. Compliance History of Key Persons - Key individuals must not have a history of:

   • significant non-compliance with tax or excise regulations

   • fraudulent activity under any tax regime

3. No links to Non-Compliant Businesses - There should be no known associations between the business or its key persons and other non-compliant or fraudulent businesses.

4. Relevant Criminal Convictions - Key persons must not have unspent convictions for offences involving dishonesty or links to organised crime. You can check whether a conviction is spent at the gov.uk conviction checker.

5. Accuracy and Integrity of the Application - The application must be:

   • complete and accurate

   • free from any attempt to mislead or deceive

6. Compliant with Record-Keeping Requirements - There must be no evidence of negligent or repeated failures to meet HMRC’s record-keeping obligations.

7. No Previous Attempts to Avoid Approval - The applicant or key persons must not have previously traded without the required approval or attempted to circumvent the approval process.

8. Commercial Viability and Credibility - The business must provide sufficient evidence to demonstrate its commercial viability and credibility.

9. No Outstanding or Poorly Managed HMRC Debts - There should be no unmanaged tax debts or a history of poor payment behaviour.

10. Effective Due Diligence Procedures - The business must have appropriate due diligence systems in place to prevent involvement in illicit supply chains.

Making a Decision

• These criteria are not exhaustive. You may refuse approval for other justifiable reasons if there is evidence that the applicant poses a serious risk to the revenue

• Conversely, failure to meet one or more criteria does not automatically justify refusal. You must assess whether the failure indicates a serious threat to the revenue

• Always consider the full facts of each case and apply the following test: “Would approving this applicant pose a serious threat to the revenue?”
  Your decision must be based on the outcome of this test.