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HMRC internal manual

Customs Authorisation and Approval

Guarantee Requirements for Customs Authorisations and Approvals: Explanation of potential debts

Potential debts relate to amounts of customs duty (and customs charges) which may become payable at a later date.  For example, goods held in duty suspense arrangements or goods released at a nil or reduced rate of duty that have conditions attached to the relief.

Guarantees for potential debts have to be provided to secure the future payment of the customs duty should any debts become due and fail to be paid by the debtor.

Guarantees for potential debts are calculated using the highest rate of duty that may be applied to the goods.  The guarantee calculation does not take account of any preferential or tariff quotas rates that are available.  This is because, whilst they remain ‘potential debts’, no eligibility for the reduced rates have been confirmed.