Duty deferment accounts are used to pay import taxes “on account” rather than paying duty and import VAT for each individual shipment at the time goods are imported. Since the introduction of the Union Customs Code (UCC) last year, HMRC has not been issuing duty deferment accounts, but has instead issued the new Customs Comprehensive Guarantee (CCG).
The difference between the two is that a CCG is a customs authorisation, and it granted to a trader as long as it meets certain requirements, whereas a deferment account is a method of payment and was granted to any trade who requested one.
The big issue with the CCG however is that HMRC has a statutory 120 days in which to issue the CCG authorisation, leading to traders facing delays in getting the authorisation issued. HMRC has recognised this problem and have confirmed at a recent meeting that it will begin issuing duty deferment accounts again in the near future. The mechanics are yet to be confirmed, however, it is expected that it will follow the pre-UCC process. The trader will still be required to provide a bank guarantee to cover two-months of import duty.
If a deferment account is coupled with a Simplified Import VAT Accounting (SIVA) authorisation, the requirement to secure any import VAT is waived, meaning that the amount of capital tied-up in a bank guarantee is significantly reduced.