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HMRC internal manual

Import and National Clearance Hub Procedures

Appendices: Appendix D: methods of paying and securing revenue charges

1. Paying charges


Duty etc is paid outright at the time of importation when it is not taken on deposit or recurred by bond, banker’s guarantee or undertaking. The charges may be collected by immediate payment or deferred payment.

Immediate payment

Immediate payment is when charges are paid by cash, guaranteed cheque or other similar means.

Deferred payment

Approved traders may defer payment of all charges at importation for an average period of one month, if they provide adequate security in the form of an approved bank guarantee.

Application to use this facility must be made to the Central Deferment Office (CDO) Accounts will process the application and, if approval is given, arrange for the computer records to be set up.

Charges are collected by direct debit from the approved trader’s bank account.

2. Standing charges



When it is impractical to immediately ascertain how much duty, if any, is payable on imported goods entered for free circulation, section 119(1) of the Customs & Excise Management Act 1979 provides that goods may be delivered on the importer giving security by deposit of money or otherwise for any amount unpaid that may be payable as duty.

Section 119(3) provides that when goods to be delivered under this section, and when the amount of duty payable has been determined, the importer will be given a notice specifying that amount. Under section 119(4) the amount specified or, when any amount has been deposited under section 119(1), any difference between those amounts is to be paid or repaid as the case requires.

These provisions apply to most cashless securities and to certain Miscellaneous Cash Deposits (MCDs). They do not apply to MCDs taken in cases when the goods are not entered for free circulation or when the deposit is taken for some reason other then it being impracticable to determine immediately the amount of duty payable.

Section 119(4) gives the Commissioners full powers of recovery if it is found that the original deposit is insufficient to cover the duty determined to be payable.

Miscellaneous Cash Deposits (MCDs)

MCDs are cash securities held in a suspense account which are only brought to account as duty after lodgement of a prime entry or Post Clearance Demand Note.

These are also appropriate when it is probable that a deposit will be repaid and to avoid unnecessary documentation when an additional deposit is considered desirable.

Control is exercised by the National Import Duty Accounting Centre (NIDAC), the National Clearance Hub and the CPU through records that are reconciled periodically, together with listings of unadjusted MCDs, still on hand.

Payment of an MCD may only be deferred when it is payable at the time of passing the entry, in which case it is to be numbered in the ‘Duty Deferment’ series.

The MCD numbering ranges that are to be used, are as follows:


  • Cash:000001 - 149999
  • Deferred:150000 - 399999

These will be automatically allocated by the computer for both cash and deferred MCDs.

  • Manual, Cash: 40000 to 79999
  • Manual. Deferred: 80000 to 99999

Bankers guarantees and undertakings

An undertaking is an official document, signed by the importer by which the importer undertakes to pay duty and any other charges due on the imported goods imported under duty relief provisions, if there is a breach of any of the conditions of relief. Undertakings may also be made for the subsequent production of certain documents.

Bankers guarantees are undertakings normally given by the importer or importer’s authorised agent, underwritten by an approved bank, acting as guarantors. Guarantees may be individual, each covering a specific transaction, or standing, covering a number of transactions.

NIDAC control the setting up of CHIEF guarantee accounts. See the Annex attached to this Appendix for further information on CHIEF Reasons For Security (RFS). For further guidance on Departmental securities please refer to specific regime guidance.

3. VAT

With certain exceptions (see below), all importers must pay VAT (either outright or by use of deferment arrangements) on all standard rated goods imported.

The main exceptions to this are:

  • importations under certain CPCs (see the Tariff Volume 3 Appendix E), where VAT is relieved
  • importations by certain government bodies using the deferred billing arrangements under CPCs 40 00 052, 49 00 052 (see C2-29A (UK Govt. importations)), and
  • when VAT is secured (ie not paid outright), VAT evidence will not be issued until the VAT is brought to account by a Post Clearance updated document.

4. Charges part paid and part secured

Situations will arise whereby a reduced (not NIL) rate of duty applies but the appropriate certificate is not yet available, ie will be produced after clearance.

Duty at the reduced rate is to be taken outright and the balance, ie the difference between the reduced and full rates are secured.

Situations where there is a provisional customs value declared. Take outright the amount of duty on the provisional value. Take security adequate to cover the difference between that amount and the amount to which the goods might ultimately be liable.

Two Customs duty tax lines (each with the same tax type) will be shown in box 47. The first duty tax line will be completed in respect of the reduced amount payable. The second duty tax line will be completed in respect of the balance of the duty that is being secured.

The security is to be discharged when the outstanding evidence is produced and found to be satisfactory.

Time limits for production of particulars or documents missing at the time of entry

  • Normally 14 days
  • Reduced or zero rate of duty - 4 months.
  • Customs value normally 14 days but may be extended in exceptional circumstances.

Time limits must be specified. These must never exceed 3 years from the date of the entry. Where the limit is exceeded the amount held as security must be brought to account as duty.

Annex to Appendix D

CHIEF - Reasons for Security (RFS)

1. What is RFS?

RFS fall into two categories - ‘CPC related’ and ‘standard’ - and very rarely change. Most are generated by CHIEF but some (‘M’ and ‘N’ series) can be declared by traders. The current list of ‘M’ and ‘N’ RFS can be found in the Tariff, Volume 3, part 3, (Box 44). The full list of RFS codes can be found on CHIEF IES.

2. Why are they generated and how are they controlled?

RFS are generated or declared whenever CHIEF or the trader identifies that revenue has to be secured in some form. On full SADs this will be evident from the fact that a ‘secured’ tax line exists in box 47, ie the Method of Payment code in box 47e is other than A, D, or F.

CHIEF usually calculates both the revenue that must be taken outright, and the revenue that must be secured. When the entry is ‘cleared’ the entry security details (with up to 3 RFS) are held on CHIEF and reports are sent to the relevant control point (National Clearance Hub or NIDAC). CHIEF retains details of and provides reports on, outstanding securities (entries).

The relevant control point should update CHIEF (IES) whenever the reason for taking security has been resolved, but the other ‘control point’ can also update CHIEF.

Some ‘M’ and ‘N’ codes, see Tariff Volume 3, Part 3 for further information.

  • 1M = Provisional Value.
  • 2M = Tariff classification to be determined.
  • 3M = Release before completion of landing account.
  • 4M = Goods for official test.
  • 5M = Specific direction given.
  • 6M = Security required for clearance request.
  • 7M = CT document subject to verification.
  • 1N = Full value secured for IPR goods.
  • 2N = Exemption is claimed from levy but evidence is incomplete or unsatisfactory