Fit and proper test: fit and proper criteria
Before taking a decision to approve an application you must be satisfied that the main criteria are met:
- there is no evidence of illicit trading indicating the business is a serious threat to the revenue (assessments, seizures, penalties and so on)
- key persons involved in the business (directors, beneficiaries, other guiding minds) have not been previously involved in significant revenue non-compliance, or fraud, either within excise or other regimes
- there are no connections between the businesses, or key persons involved in the business, with other known non-compliant or fraudulent businesses
- key persons involved in the business have no criminal convictions which are relevant, for example, offences involving any dishonesty or links to organised criminal activity - HMRC will normally disregard convictions that are spent provided there are no wider indications that the person in question continues to pose a serious threat to the revenue (an ‘unspent’ conviction is one that has not expired under the terms of the Rehabilitation of Offenders Act 1974)
- the application is accurate and complete and there has been no attempt to deceive
- there has not been negligent or persistent failures to comply with any HMRC record-keeping requirements
- the applicant, or key persons in the business, have not previously attempted to avoid approval and traded without approval
- the business has provided sufficient evidence of its commercial viability and/or credibility
- there are no outstanding, unmanaged HMRC debts or a history of poor payment
- the business has in place satisfactory due diligence procedures to protect it from trading in illicit supply-chains.
Whilst you should take all the above criteria into account, they are not exhaustive. You may refuse approval to a wholesaler for reasons other than those listed if you have other justifiable concerns and evidence that the applicant is a serious risk to the revenue. Equally, there may be some cases where particular failures of the criteria on their own would mean refusal or revocation is unreasonable and disproportionate. The full facts of each case must always be considered. You must consider whether the failures in question are evidence that the person would pose a serious threat to the revenue if approved as a wholesaler and make your decision according to that test.