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.

  1. VPDS126010
    Evidence of illicit trading
  2. VPDS126020
    Key Persons
  3. VPDS126030
    Connections to other non-compliant or fraudulent businesses
  4. VPDS126040
    Key persons with criminal convictions
  5. VPDS126050
    False or incomplete information on the application
  6. VPDS126060
    Record keeping
  7. VPDS126070
    Commercial viability
  8. VPDS126080
    Outstanding departmental debts
  9. VPDS126090
    Due diligence
  10. VPDS126100
    Applicants that have previously traded without approval