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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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Debt and return pursuit: customs duties: customs duties: how customs debts arise and are notified

How customs debts arise

Debts arise as a result of any of the following:

  • incorrect tariff classification
  • incorrect use of quota
  • incorrect claim to preferential rate of duty
  • undervaluations or
  • errors in duty calculations; or
  • irregularities in the movement of goods (missing or diverted goods).

How customs debts are notified

The debt is notified to the debtor on Form C18 (Post-clearance demand note) issued by CPU, Salford.

The debtor receives a reminder if payment is not received within 10 days of issue of the C18 or Charges letter. If after a further 35 days (i.e. 45 days after the C18 was issued) payment is still outstanding, the debt is referred to the appropriate TO for recovery action.

A copy of the C18 is to be sent to the CRU when the case is referred for civil recovery action. The originating office should identify those persons against whom civil recovery action may be taken. If in doubt consult the originating office.


Debts that are unpaid after 10 days attract interest (i.e. from day 11 onwards) until the debt is paid. Interest is payable immediately. Usually officers assess the amount of interest and notify the trader of the amount of interest payable when the C18 is paid.

An Interest Notice is sent with the Form C18 (Post-clearance demand note) to the customer advising that failure to pay the demand within 10 days will result in interest being charged until the debt is paid.

Cancellation or amendment of a Form C18

The originating officer may request cancellation or amendment of a C18 liability in certain circumstances (see C2-3 Import Entry procedures (specifically TA 2/03)).

The CPU must inform the TO or CRU immediately if the C18 is withdrawn or amended.