UK duty deferment account: pay import duty once a month

How the account works

With a duty deferment account, the duties and import VAT on everything an importer declares during one calendar month are added up and paid in a single Direct Debit. For declarations in the Customs Declaration Service (CDS), payment is taken on the 16th of the following month, or the next working day; excise duties follow their own cycle, from the 15th of one month to the 14th of the next, and are paid on the 29th. Statements are available online 3 working days before the Direct Debit is taken, and deferment gives an average of 30 days' credit.

Each account has a monthly limit, set by the guarantee level or deferment limit. If it is reached, no more duties or import VAT can be deferred for the rest of that month, and further charges must be paid immediately in another way until the limit is raised or a new month starts. If a Direct Debit fails, HMRC suspends the account until it receives payment and a valid Direct Debit instruction, may charge late-payment interest, and can revoke the facility if payments are repeatedly outstanding.

What you need to apply

• An EORI number
• An online application through HMRC's duty deferment service
• A Direct Debit Instruction, even if you will not use the account straight away
• A financial guarantee from a UK-established, PRA-regulated institution, or a guarantee waiver
• Extra financial information for a waiver of up to £10,000 a month if you do not file accounts at Companies House
• Form PFS1 and supporting documents for a waiver over £10,000 a month

Guarantee waivers, Northern Ireland and postponed VAT

Most traders established in the UK will not need a financial guarantee, because they can apply for a guarantee waiver; holders of approvals such as AEO were contacted by HMRC about a waiver. A business not established in the UK cannot get a waiver, so a foreign seller acting as importer on DDP terms needs a guarantee from a UK institution, or works with a UK customs agent.

Accounts approved for Great Britain should not be used in Northern Ireland: for imports into Northern Ireland, duty deferment uses a Customs Comprehensive Guarantee, and a business moving goods into both may need both, unless it uses an agent. For import VAT only, an importer does not need a deferment account if it uses postponed VAT accounting and declares the VAT on its VAT return.