Importing and Duty Deferment Payment Method

Import VAT and Duty is not covered by the automatic VAT deferral announced by HMRC. In an unprecedented move HMRC will consider time to pay under its COVID-19 arrangements for importers holding a Duty Deferment account.

What we know

  • HMRC will not suspend Duty Deferment Accounts if a business is unable to pay its customs debt.
  • Businesses are expected to contact HMRC to discuss time to pay arrangements via the COVID-19 Helpline.
  • All UK businesses who have an existing Duty Deferment Account (DAN) are eligible to apply for time-to-pay.
  • Registered importers who do not have a Duty Deferment account can also request time to pay.

What does this mean for my business?

  • Duty Deferment processes continue to operate as normal and HMRC will continue to collect direct debits.
  • If a business is unable to meet the direct debit payment, it must contact the Duty Deferment Office on 03000 594243 or by email at cdoenquiries@hmrc.gov.uk or the COVID-19 helpline on 0800 024 1222. Account holders will be asked to provide an explanation of how COVID-19 has impacted their business finances and cash flow.
  • No penalties or interest for late payment will be charged by HMRC for failure to pay the customs debt for the March 2020 period.
  • HMRC are considering this on a monthly basis and is dependent on COVID-19 developments. We therefore advise that businesses ensure they monitor the situation or contact us for an update.
  • We recommend that businesses review their planned imports and establish the potential customs debt.

Importers without a Duty Deferment Account

  • If you are importing but are concerned that you will not have funds to pay the customs duties on arrival at the UK Port, please contact the nominated shipping agent to discuss possible payment options.
  • Don’t leave until the last minute as your goods may not be customs cleared resulting in them being held at the port.
  • Goods held at the port continue to incur additional port storage or demurrage charges if not customs cleared.
  • Registered Importers who pay cash or an equivalent and are facing severe financial difficulties as a direct result of COVID-19 can contact HMRC to request an extension to the payment deadline at the time the payment is due. They will be asked to provide an explanation of how Covid-19 has impacted on their business finances. HMRC will consider this request and decide whether or not to agree an additional time to pay. The decision will be taken on a case- by-case basis and could be refused.
  • If the request is approved the conditions, including the length of time offered, will depend upon the importer’s individual circumstances and may require the holding of a guarantee for the period of the time extension. HMRC cannot offer this facility to non-registered importers. For further information, contact the Customs Debt Policy inbox (custdebtrr.customspolicy@hmrc. gov.uk)

Is there anything else I should know?

  • We recommend that all businesses monitor their Deferment Account via the Government Gateway.
  • HMRC advise that you should not cancel your direct debit as these measures are being reviewed regularly. The direct debit is a fundamental part of the DAN.
  • If you have any concerns, please speak to us to discuss the best way to approach HMRC.
  • Most important is to negotiate in time with HMRC so that they can make arrangements not to collect the Direct Debit.
  • There is a rumour that HMRC will use postponed import VAT accounting as a short term measure to solve the cash flow problem of import VAT. This would be very helpful to all importers and would significantly improve the movement of international trade into the UK.

For further clarity or help on the above, please do not hesitate to contact Partner, Jonathan Main.