HMRC is to extend the deadline for paying import duty and VAT on all goods for businesses with COVID-19 related cash flow issues, it has just been announced.
However, businesses must actively apply for payment deferment, depending on how their duty and import payments are currently settled – see columns below.
The deadline for applying is tomorrow – Wednesday, 15 April 2020.
The Institute advises relevant importers that they need to act now, today.
Duty Deferment Account Holders are allowed to defer payment of duty, usually backed by a bank guarantee.
The move follows active lobbying by the Institute of Export & International Trade on behalf of its members.
However, the IOE&IT is urging the government to make import VAT and duty deferment an automatic process.
“We welcome the government’s actions to offer deferments on import VAT and duties but ask that these are made automatically rather than relying on businesses to apply for them,” said Marco Forgione, director general of the IOE&IT.
“It’s clear that the funds available through the Coronavirus Business Interruption Loan Scheme are not reaching MSMEs quickly enough. The UK runs the risk that many viable businesses will be destroyed unless more is done by government to help cash-flow.
“Automatic deferral of import VAT and duties will make a difference to many of the UKs businesses trading internationally.”
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Duty Deferment Account Holders: what to do now |
Importers not holding a Duty Deferment Account: what to do now |
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Who: The announcement applies to 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 due on 15 April 2020.
How: Businesses should contact HMRC for approval to enter into an extended period to make full or partial payment - without having their bank guarantee called upon or their deferment account suspended.
The account holder should contact the Duty Deferment Office by phoning 03000 594243 or the COVID-19 helpline on 0800 024 1222, or by email to cdoenquiries@hmrc.gov.uk.
What: Businesses will be asked to provide an explanation of how Covid-19 has impacted their business finances and cash flow.
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 this 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 agrees to an extended payment period, interest will not be charged on the outstanding payments - provided they are paid in full by the agreed date.
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Who: Registered importers who pay cash or an equivalent and are facing severe financial difficulties as a direct result of Covid-19.
How: These businesses can contact HMRC to request an extension to the payment deadline at the time the payment is due.
What: They will be asked to provide an explanation of how Covid-19 has impacted 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 bank guarantee for the period of the time extension.
This facility is not open to non-registered importers.
For further information, please contact the Customs Debt Policy inbox: (custdebtrr.customspolicy@hmrc.gov.uk)
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