Guidance: How to use your duty deferment account

If you’ve already set up your duty deferment account, you can defer paying duties and import VAT when you complete your declaration.

You cannot defer duty if:

• you have exceeded your guarantee or account limit for the calendar month
• the amount in your account or guarantee left for the calendar month does not fully cover the deferment requested
• we have stopped the use of your account due to payment, or other compliance problems

If we refuse deferment, there will be a delay in clearance. It is important for you to have the correct guarantee or account level for any large import or peak period liabilities.

What you can defer

You can defer:

• customs duties
• import VAT
• excise duty VAT
• excise duties (including Tobacco Products Duty)
• levies imposed under the Common Agricultural Policy of the EU
• Positive Monetary Compensatory Amounts under the Common Agricultural Policy
• anti-dumping or countervailing duties imposed by the EU
• interest charges on customs debts

When you must pay

Customs Duty and import VAT

You must pay the duties and import VAT you defer during one calendar month (the accounting period) as a total sum, either:

• on the 15th of the next month
• on the next working day after it, if the 15th is not a working day

This means that you can defer duties and import VAT for between 2 and 6 weeks — an average of 30 days credit.

This period of deferment also applies to excise duty for registered consignees.

If you are registered for VAT you can account for import VAT on your VAT return.

Excise duties

You still get an average of 30 days credit when you defer excise duty. The accounting period runs from the 15th of a month to the 14th of the next month. You must pay either:

• on the 29th of the latter month (or 28 February in non-leap years)
• on the working day before that if the 29th (or 28 February in non-leap years) is not a working day

How to pay

You must pay by the BACS system of Direct Debit in pounds sterling. We arrange for the total amount you defer in the accounting period to be debited automatically on payment day from your bank account and transferred to our bank account.

If the amount is over £20 million, you need to contact the Duty Deferment Office for information about paying by CHAPS.

What happens if your Direct Debit fails

We will suspend your account until we receive payment and a valid Direct Debit instruction.

We may also:

• charge interest on late payment of deferred customs debts
• suspend a duty deferment facility that has outstanding payments
• revoke a duty deferment facility if payments are consistently outstanding, if this happens you will have the right to appeal against this decision

If you are an agent acting in your own name but on behalf of an importer, you are jointly and severally liable for any customs debt that may arise.

Under this type of representation you may be held responsible for any deferment debts incurred by the importer you represent.

If the amount due is wrong

When you defer duties or import VAT and a transaction requires correction because more or less was due on the declaration, we will normally adjust the transaction in your deferment account. This will be done before we take payment from you if there’s time.

Where this is not possible, you must pay any additional duties and import VAT due immediately or we will repay any excess duties and import VAT taken on, or soon after debit day.

We do not normally repay overdeclared VAT to VAT-registered traders. We expect importers and owners to recover the amount on their next VAT Returns, subject to the normal rules governing the deduction of input tax.

Read more about how imported goods are treated for VAT purposes.

Exceeding your guarantee level or deferment limit

If you exceed your guarantee level or deferment limit in any calendar month, you will not be able to defer any more duties and import VAT for the rest of that month.

All other import duties and import VAT would need to be paid immediately by other payment methods until either:

• you increase your guarantee level or deferment limit
• a new calendar month begins

You can apply to have your guarantee level changed at any time, you do this by asking your guarantor to send an amendment to the existing guarantee.

We reserve the right to:

• refuse to allow duties and import VAT to be deferred if your guarantee level is exceeded
• suspend and revoke a duty deferment facility if the guarantee level is persistently exceeded, you will be given prior written notification of such action
• suspend and revoke a duty deferment facility if the guarantee is cancelled, or withdrawn, without a suitable replacement being given

Where a deferment facility is revoked, you will have the right to appeal against this decision.

If you have approval to use a reduced security scheme for specific types of deferred tax, you must continue to give full security for all other deferred taxes.

Making changes to your account

We may suspend duty deferment facilities if you do not tell us about changes quickly.

You must contact us immediately if:

• your company name changes — a Certification of Incorporation Upon Change of Name must be given
• your address changes
• your VAT registration number changes
• you stop trading or if your business will be carried on by another legal entity
• you want to close your duty deferment account

If you are cancelling your duty deferment facility, you must wait until all outstanding payments have been made.

Do not cancel your Direct Debit instruction until all payments are up to date.

To make changes to your account for excise duty only, contact the Duty Deferment Office.

Find out how to make changes to a duty deferment account for use in Great Britain only.

Changing a duty deferment account with a customs comprehensive guarantee

To make changes to a duty deferment account with a customs comprehensive guarantee, email: customs-comprehensive-guarantee-team.ccto@hmrc.gov.uk

You can also write to:

Changes to your Direct Debit

If you transfer your deferment account to another bank, you must send us a new Direct Debit instruction at least 10 days before your next payment day.

You must not cancel your previous Direct Debit instruction until the new one is in place.

Duty deferment statements

If you are declaring using both the Customs Handling of Import and Export Freight (CHIEF) and Customs Declaration Service systems you will receive 2 statements and require 2 direct debts but you will not be charged twice for the same liability.

If you’re using CHIEF

We send your statements weekly (4 for each calendar month). It tells you:

• about your deferments (including excise duty) at each of our accounting centres
• the total amount you have deferred so far in the month
• when deferment of the duty starts

This helps you to check your deferred transactions against your guarantee limit.

We do not normally send out ‘NIL’ statements, unless they have amounts brought forward from previous statements.

It is important that you keep the original versions of your statements but you can get copies of your statements if you’ve lost them.

If you’re using the Customs Declaration Service

You can get your statements online. Your statements will be available 3 working days before your direct debit is taken.

Your statement will tell you:

• about your deferments (including excise duty) at each of our accounting centres
• the total amount you have deferred so far in the month
• when deferment of the duty starts

This helps you to check your deferred transactions against your guarantee limit.

Duty deferment ‘account suspended’ notifications

If you have only subscribed to the Customs Declaration Service to view your postponed VAT accounting statements online and are not using duty deferment on the service, you will get a deferment account ‘suspended’ notification.

This suspension only applies to your Customs Declaration Service deferment account status. It does not affect your CHIEF deferment account.

You may also get deferment account ‘suspended ’ notification if your Direct Debit has not been set up for the Customs Declaration Service. If you have a Customs Declaration Service deferment account and are eligible to use the service, you must set up a new Direct Debit before you can use your duty deferment account for declarations made using the service.

Get more information

If you have a query, you should contact your agent in the first instance. Contact the National Clearance Hub if you:

• cannot resolve the query with your agent
• need a list of accounting centres with their addresses and phone numbers

If you need to make any changes to your statement address, or if a ‘For attention of’ would be beneficial to you, write to the Duty Deferment Office.