What You Need to Know About Duty Deferment Accounts
What is a duty deferment account?
Duty deferment is the main payment method for customs, import VAT and excise duty.
Having a duty deferment account lets you defer payments for customs duty, import VAT and excise duty and make monthly payments to HMRC through Direct Debit, instead of paying for individual consignments immediately at import, or when released from an excise warehouse.
In order to benefit from a DDA, you are required to satisfy certain authorisation criteria upon application and during the length of time that the account is held. See GOV.UK for more information.
How does it work?
It works like a credit account where you pay HMRC via monthly Direct Debit. The payment for customs duty and import VAT is usually taken on the 15th day of the month. This date also applies to excise registered consignees. Excise payments are normally taken on the 29th of the following month. More information on payment dates can be seen on GOV.UK.
Once you’re approved for a DDA and your account is set up, you will be issued with a seven-digit Deferment Approval Number (DAN) which will need to be quoted on customs and excise declarations.
Each DDA has a deferment limit which caps the amount you can defer each month. You may need to get a guarantee to hold a DDA. See more information on whether you need a guarantee below.
When should I apply for a duty deferment account?
If you import non-controlled goods into Great Britain from the EU and use delayed declarations, you’ll need to have access to a duty deferment account when you submit your first supplementary declarations (which should be within 175 days after goods are imported to GB).
When we have all the information to process your DDA application, we will aim to complete this within 30 working days. However, if you need to apply for a financial guarantee, this may take longer. You must apply for your DDA and Simplified Customs Declarations Processes authorisation in good time to meet the 175-day deadline for supplementary declarations. See GOV.UK for more information on delayed declarations.
If you use a full customs declaration to declare your goods to free circulation you can choose to pay any import duties due using a DDA or you will need access to another payment method.
Non-controlled goods are goods not included on the controlled goods list. You cannot use delayed declarations if you are importing goods on this list.
What do I need to know before I apply for a duty deferment account?
You may need to provide a guarantee for duty deferment covering two months’ liabilities if you’re not eligible for a waiver. You will also need to be able to arrange a Direct Debit instruction from a UK bank.
Can I apply for a DDA without getting a guarantee?
When applying for a DDA in Great Britain, you may be able to get one without using a guarantee if you are eligible for a guarantee waiver:
You may defer customs duty, import VAT and excise duty up to £10,000 per month without providing a guarantee if your business is solvent and you do not have a history of serious non-compliance.
If you wish to defer above £10,000 per month, you’ll only qualify for a full guarantee waiver if you meet the above criteria and have sufficient resources to pay the full amount you have asked to defer. You may still be eligible for a partial waiver if you do not meet the requirements for a full waiver.
If you do not qualify for a guarantee waiver, you can still be approved to use duty deferment if you provide a guarantee. See GOV.UK for more information on guarantees.
If you have Authorised Economic Operators (AEO) status, Excise Payment Security System (EPSS) approval or Simplified Import VAT Accounting (SIVA) status, you can use duty deferment in Great Britain without providing a guarantee.
If you hold a DDA prior to January 2021 without AEO status, EPSS approval or SIVA status, you can apply to HMRC to have a guarantee waiver applied to your existing DDA.
UK VAT registered businesses can account for import VAT using Postponed VAT Accounting (PVA) for goods they import into Great Britain from outside the UK, and into Northern Ireland from outside the UK and EU. This means they will account for and recover import VAT on the same VAT return.
If a trader uses PVA then there is no need to include the relevant import VAT amounts in their duty deferment account or any associated guarantee. More information on PVA can be found on GOV.UK.
How do I apply for a duty deferment account?
You can apply for a DDA and an optional guarantee waiver in Great Britain using an online application form.
If you’re applying for a guarantee waiver over £10,000, you’ll need to complete additional information (on form PFS1) about your financial standing and provide supporting documents.
Guidance on how to apply for a DDA in Great Britain can be found on GOV.UK.
Can an intermediary help me?
If you’re using an intermediary to move your goods, they may already be approved or authorised by HMRC for various facilitations, including DDA which they can use on your behalf. Some intermediaries may still require you to have your own DDA, so you should check this with them and provide written authority to HMRC before they use your DDA.
See GOV.UK for more information.
If you move goods between GB and NI, you may be able to use the TSS’s DDA.
Need further support?
Chamber Customs - If you need any assistance with completing declarations or require advice on how to submit these declarations, our team is at hand to help. Simply email them at email@example.com or complete our short online survey and a member of our team will be in touch.
Need help understanding new VAT rules? We work closely with Strategic Partners who can offer you up to 30 min complimentary virtual advice session. Email us at firstname.lastname@example.org to book one.