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HMRC internal manual

Customs Freight Simplified Procedures

Guarantee requirements: level of guarantee required

Standard requirement

The level of a guarantee provided must be sufficient to cover the authorised trader’s actual duty and VAT liability for one calendar month, unless the trader is authorised for Simplified Import VAT Accounting (SIVA) or Excise Payment Security System (EPSS). A trader claiming preferential duty rates would provide their guarantee at the preferential duty rate not the full Tariff rate for those commodities.

Customs Comprehensive Guarantee (CCG)

When an existing CFSP authorisation is reassessed to UCC standards then a CCG must be applied for in respect of any actual and potential goods being declared after 1st May 2016. In addition, any new CFSP authorised Traders(after 1st May 2016) must have a CCG in place before they declare any goods using their CFSP authorisation.

In the case of importers authorised in their own right, their normal duty deferment account will be sufficient security and Customs will not normally require any additional security for actual debts.

However, if the importer also declares goods to customs procedures which incur a potential debt, such as Special Procedures (IP, CW, End-use etc) then a guarantee will be required to cover these debts too.

A Customs Comprehensive Guarantee (CCG) should be applied for in order to cover both actual (deferment account) and potential debts when a CFSP authorisation is reassessed to UCC standards or in the case of a new CFSP authorisation post 1st May 2016.

In the case of IRs their guarantee must be sufficient to cover all goods declared using their CFSP authorisation (eg sufficient to cover their own and their clients importations unless they apply to use their customers deferment for both payment and security. (Please see CFSP14300 for further details).

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Simplified Import VAT Accounting (SIVA) and Excise Payment Security System (EPSS)

Since the introduction of SIVA/EPSS, it is no longer necessary for authorised, compliant traders to provide security for Import VAT or Excise purposes through their deferment account. However, full security must still be held for all Customs duties.

For example, a trader has a £100,000 monthly Deferment Account Limit, of which £80,000 is to cover their Import VAT liabilities, £10,000 for their Customs duty liabilities and £10,000 for Excise duty. Under SIVA/EPSS, this trader would only need to provide a guarantee for £10,000, to cover their total duty liabilities, as they would be authorised to operate without a guarantee for the Import VAT and Excise amounts.

More details about SIVA/EPSS can be found on the HMRC website