Find out about customs guarantees and when you may need one.
A customs guarantee is an agreement to cover debts arising from customs duty, import VAT and excise. If the debt has already arisen it is known as actual debt. If it arises later, it is known as potential debt. A customs guarantee is often required when duty is not paid at the time of import or export. A guarantee may also be needed when the value of import duties is unknown or disputed.
If you do not pay the duties or charges when they are due, your guarantor becomes liable for them.
You may need a customs guarantee to import or export if you use one of the following procedures:
- duty deferment
- customs special procedures
You will not usually need a guarantee to use customs special procedures or duty deferment accounts in Great Britain (England, Scotland and Wales). You’ll be told as part of the application process if you need one.
You will usually need a guarantee to use transit, customs special procedures or duty deferment accounts in Northern Ireland.
You can get a customs intermediary, to manage these procedures and provide a guarantee for you.
Get approval for a customs guarantee and work out how much you will need
If you need a guarantee, in most cases it will be a customs comprehensive guarantee. This requires authorisation but allows multiple customs procedures to be covered by one guarantee from a bank or insurer.
Your guarantee amount must be sufficient to cover the full value of all duties and taxes that may be due for all goods in customs processes at any one time.
You may be able to qualify for a reduction of some or all of the amount of duty that needs to be guaranteed, if you meet certain requirements.
If you only use customs special procedures or transit 3 times a year or less, you may be able to use an individual guarantee. Temporary Admission authorisation by declaration may be used more than 3 times a year with an individual guarantee.
When getting a guarantee you should:
Finding a guarantor
You may need to get a guarantor for your customs guarantee if you do not qualify for a full reduction of the guarantee amount. Your guarantor will be liable for any duties or charges you do not pay so they must have sufficient resources and stability.
Most major banks and insurance companies have approval to act as a guarantor. HMRC will usually accept any firm regulated by the Prudential Regulation Authority of the Bank of England.
Your guarantor must be established in the UK, unless the guarantee is for special procedures or duty deferment accounts in Northern Ireland. In this case the guarantor must be established in Northern Ireland or the EU.
Find out more about acting as a guarantor for a person using common or union transit.
Giving a Joint Contractual Liability
You may be able to give a Joint Contractual Liability (JCL) as security for your potential debts. This allows separate legal entities (not financial institutions) to guarantee the potential, but not the actual, customs debts of another legal entity in some circumstances.
Your JCL provider must be established in the UK, unless the JCL is for special procedures or duty deferment accounts in Northern Ireland. In this case the JCL provider must be established in Northern Ireland or the EU.
Getting a guarantee for a duty deferment account
You can apply to defer your payments of import duties for a calendar month into a single Direct Debit transaction paid in the middle of the following month using a duty deferment account. You may also be able to release goods into free circulation before you pay import duties.
You must apply for approval to hold a duty deferment account. Most UK businesses will not need a guarantee to use duty deferment in Great Britain unless your business:
- has been insolvent
- has a history of serious non-compliance
If your business is established outside the UK, you may still be able to hold a duty deferment account in Great Britain if you provide a guarantee from a UK guarantor.
If you’re based in Northern Ireland, you’ll still need a guarantee to hold a duty deferment account.
Check which type of duty deferment account you need to apply for.
Check if you can get a duty deferment waiver.
Getting a guarantee when using customs special procedures
You may need a customs guarantee when importing goods and using certain customs special procedures:
- Inward Processing
- Outward Processing
- Temporary Admission
- Custom Warehouse
- Authorised Use
Getting a guarantee when using transit
You may need a customs guarantee to move goods to, from, through or between common transit countries which includes the UK and all EU member states without the need to complete customs declarations or pay import duties.
If you regularly move goods using transit procedures, you can apply for authorised consignor status. This will allow you to start the movement of goods at your own premises rather than at a customs office. You will need a customs comprehensive guarantee in place to apply for Authorised Consignor status.