Glossary
What is a deferment account guarantee?
A deferment account guarantee is the financial security a bank or insurer provides to HMRC to back a duty deferment account, covering the customs duty and import VAT a trader defers over each accounting period. |
Why does HMRC ask for one?
A duty deferment account lets a trader release goods now and settle the duty later by direct debit. HMRC is effectively extending credit, so it takes security against the amount at risk normally sized to the trader’s monthly deferment limit rather than to any single consignment.
How the requirement can be reduced
- AEO authorisation can cut the guarantee requirement, and in some cases remove it.
- A guarantee waiver may be available to traders who meet HMRC’s financial standing and compliance tests.
- Excise duty is treated separately from customs duty and VAT check which elements any waiver actually covers.
What happens when the limit is reached
Once deferred liabilities hit the guarantee level, the account stops accepting new entries and consignments stop clearing. Headroom matters most at peak season, when a month’s volume can quietly outrun a limit that was set against last year’s trade.
iCustoms shows deferred duty as it accrues, so you see the limit coming before the border does. |
