Delaying import duty payments due to COVID-19

For businesses globally, the COVID-19 pandemic is creating an unprecedented amount of uncertainty. The Governments relief measures and certain HMRC payment deferrals are working to offset some of the cash-flow strains felt by businesses.

This now also extends to those businesses in the UK that trade internationally. Below we’ve set out the latest guidance from HMRC on the details of duty/import VAT payment deferrals. The latest announcement from HMRC for existing duty deferment account holders and non-account holders is set out below.

Duty deferment account holders

A duty deferment account lets you make one payment a month through Direct Debit instead of paying for individual consignments.

Duty deferment account holders who are experiencing severe financial difficulty as a result of COVID-19 and who are unable to make payment of deferred customs duties and import VAT can contact HMRC for approval to enter into an extended period to make full or partial payment, without having their guarantee called upon or their deferment account suspended. Account holders will be asked to provide an explanation of how Covid-19 has impacted their business finances and cash flow.

If you had deferred customs duties and import VAT due on 15 April 2020 and did not have sufficient funds to be able to make payment, Price Bailey advise that you contact HMRC immediately. Details of who to contact are listed on the HMRC website here.

“Duty Deferment account holders will be able to use their accounts during the extended payment period agreed unless they default on a subsequent payment in that period, in which case HMRC may consider suspending their account. The outstanding payment will not affect their duty deferment limit so they will not need to increase their guarantee to cover the outstanding payment. Where HMRC agree to an extended payment period, interest will not be charged on the outstanding payments provided they are paid in full by the agreed date.”

Duty/import VAT payments not covered by a duty deferment account

“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. We cannot offer this facility to non-registered importers.”

Further information on customs duty deferrals can be found here.

If you are worried about duty/import VAT payments due for your business and are unsure on what you need to do, please contact us using the form below.

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.


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