UK HM Revenue & Customs (“HMRC“) has issued a communication stating that it is willing to consider extending payment deadlines on a case-by-case basis, for importers facing severe financial difficulties as a direct result of COVID-19.
Businesses holding a duty deferment account may request an extension of the payment deadline for deferred customs duty and import VAT, without needing to call on a guarantee, increasing their guarantee limit, or risking their deferment account being suspended. No interest will be charged on an agreed extension. Duty deferment accounts may be suspended if the business defaults on a payment due during the extended period, and interest will be due on any payments that miss the agreed date.
Registered importers not holding a duty deferment account may request an extension to the payment deadline on a case-by-case basis, at the time when payment is due (which in most cases will be the time when goods are imported into the UK). The importer will need to explain how the pandemic has impacted its business finances. HMRC has discretion to refuse a request, and may impose conditions (including specific time limits, and/or for the importer to obtain a guarantee for the duration of the extension).
The approaches set out above are at HMRC’s discretion and will not be granted automatically. However, for businesses experiencing cashflow issues as a result of COVID-19, they may prove to be useful tools for ensuring that goods can continue to be imported into the UK in the immediate term.
Authors: Jennifer Revis and Andrew Rose.
