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Duty Deferment Accounts – Guarantee Waiver

Duty Deferment Accounts – Guarantee Waiver

VAT

On importation of goods into the UK, any relevant customs duties become due immediately at the time of import.

If a business holds a Duty Deferment Account this becomes payable on the 15th of the month after the month of import – as a result, importers with a Duty Deferment Account can delay payment of customs duties by an average of 30 days.

Import VAT incurred by VAT registered importers after 1st January 2021 will be declared via VAT return under postponed accounting.

Business can now apply for a duty deferment account and can ask for a guarantee waiver which represents a major easement ahead of the UK’s exit from the European Union. However there are also implications for businesses currently utilising deferment accounts as it means they don’t necessarily need a bank guarantee to defer duty.

In order to operate this scheme HMRC require businesses to demonstrate 3 years of customs compliance so new importers are unable to apply.

Businesses looking to import goods into the UK from EU countries from the 1st January 2021 should consider the impact of additional duty charges and decide whether operating a Duty Deferment Account would be beneficial in terms of managing costs after the UK leaves the European Union.

If you or your client import goods into the UK and are unsure if a deferment account could benefit you or if you require assistance in completing and managing the application, please call our free helpline for expert advice.

 

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