We would like to share with other UK startup businesses and existing businesses, which are starting up to trade in volume consumer electronics market. The minimum due-diligence check (in our opinion) that should be carried out on your potential suppliers and in some circumstances your potential customers, hence, going a long way to prevent fraud against your company and the HMRC Inland Revenue.



1.Mutually sign a confidential agreement between yourselves and your suppliers/customers before giving any confidential information.

2.Ask all potential customers and suppliers to forward a :

?Copy of an official notarized VAT Registration Certificate (VAT 4 or EU equivalent),

?Companies House Certificate of Incorporation and a company letterhead.

?Letter of introduction and a company utility bill or bank statement no more than 90 days old.

?Notarized photocopy of their representatives (if possible directors) passport/driver license.

3.Get your customers to open a trade account with yourselves, providing at least two commercial references and one third party reference (Accountant/Bank Manager)

4.Send your customer Terms and Conditions of trade

5.Get Terms and Conditions from your suppliers

6.Ask supplier and customers for copies of current invoices of similar orders

7.Verify all company details with HMRC Inland Revenue.

8.Get references from all specified referees.

9.Visit suppliers site and verify its existence and if possible the goods existence

10.If goods are held by a freight forwarder, then visit them to verify the goods existence

11.Keep a record of all your visits and if possible get a photo of the supplier facilities and goods.

12.Carry out company and the directors credit check by a credit reference agency

13.Check each directors details with the electoral roll

14.Get a signed supplier declaration before each and every payment is made to a supplier. The supplier declaration should at minimum state:

?We have and will continue to comply with the provisions of the Finance Act 2003 enacted as section 77A of the Value Added Tax Act 1994 (the ?Act?). This is entirely without prejudice to the Federation of Technological Industries? contention that there is no authority under European Community Law to enact these provisions. We have and will continue to comply with the domestic tax requirements of the country/countries in which we operate.

?We will undertake reasonable commercial checks to: (a) consider the legitimacy of customers and suppliers; (b) ensure the commercial viability of the transaction; and (c) ensure the goods will be as described by our supplier (d) carry out extensive due diligence on their suppliers.

?That we are not aware of and have no reasonable grounds to suspect that some or all of the VAT payable in respect of the supply to us, or by us, of telephones (and related parts and accessories) or computers (and related parts, accessories and software), has or will go unpaid.

?That we have paid fair market value for all such goods purchased by us and have re-sold all such goods at fair market value in the open market.

?We visit our supplier's premises to confirm that the business exists and has the ability to support the level of business offered.

15.Make sure that all invoices and purchase orders clearly show your and your business customers VAT number.

16.Most of all remember to stay on top of all your paper work especially import/export and business correspondent documents.

For more information about what needs to be in the declaration and other above mentioned steps please get advice from www.fti.org.uk or a professional law agencies.