How Does a Deferment Account Work in the UK?

What is a deferment account and what can be deferred?

A Duty Deferment Account (DDA) is an HMRC account that lets you make one payment a month by Direct Debit instead of paying for individual consignments. It covers customs duty, excise duty and import VAT (GOV.UK: Apply for an account to defer duty payments). Once the application is approved and a Direct Debit is in place, HMRC issues a deferment approval number, which you use on your import declarations (GOV.UK: How to set up an account). In practice it is often called the DAN (Deferment Account Number).

If you account for import VAT under postponed VAT accounting (PVA), you do not need a deferment account for import VAT. The account makes sense for duty and excise, and for businesses that do not use PVA. For more on deferring VAT, see Can You Defer VAT?.

Accounting firms advising such clients may also be interested in working with our customs agency.

Who can open an account and is a guarantee needed?

Anyone can apply for a Great Britain deferment account: an importer, a representative of importers or a person releasing goods from an excise warehouse. You need an EORI number (see how to get an EORI number in the UK). A Great Britain account does not apply in Northern Ireland, which requires a separate Customs Comprehensive Guarantee (GOV.UK: Check which type of account to apply for).

As for the guarantee:

• You can apply for a guarantee waiver, which removes the need for a financial guarantee. To qualify, you or the business you act for must be established in the UK.
• Without a waiver you must provide a guarantee from a UK-established financial institution regulated by the Prudential Regulation Authority; do not submit it until HMRC asks.
• Foreign businesses can open an account but cannot get a waiver.
• AEO holders can reduce the guarantee required.

Financial evidence for a waiver depends on scale: for a waiver of up to £10,000 a month you must give extra financial information if you do not file accounts at Companies House (for example as a sole trader or general partnership) or you file consolidated accounts; above £10,000 a month you must submit form PFS1 with supporting documents; authorised economic operators do not need to upload a PFS1 (GOV.UK).

How to apply step by step

1. Sign in to the HMRC service "Apply for a duty deferment account and optional guarantee waiver" (you can create sign-in details at your first application).
2. Provide your EORI number, company and directors' details, the customs authorisation contact and the estimated debt.
3. Wait for the decision. HMRC aims to process the application within 30 working days of receiving all information; applications needing a financial guarantee may take longer.
4. Once approved, use the deferment approval number to complete the Direct Debit instruction. You must provide it to activate the account, even if you do not plan to use it straight away.

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If you do not reply to HMRC within 30 days to its proposed options (when your requested limit exceeds your waiver entitlement), the application may be rejected (GOV.UK). Those options are a full or partial guarantee or a reduced deferral limit; we explain guarantees in Customs Guarantee: What It Is, When It Is Required and the Types.

When you pay and what happens if you exceed the limit

Each calendar month is one accounting period and the deferred amounts are paid as a single total. For CDS declarations, payment is due on the 16th of the next month (or the next working day); excise has its own cycle (15th to 14th, payment due on the 29th of the following month). The amount is collected automatically by Direct Debit in pounds sterling, and statements are available online 3 working days before collection (GOV.UK: How to use your duty deferment account).

• Exceeding the guarantee or limit: you cannot defer any more charges for the rest of that month and must pay them immediately by other methods.
• A failed Direct Debit: the account is suspended until payment and a valid Direct Debit instruction are received; HMRC may also charge interest on late deferred debts.
• Repeated breaches: can lead to suspension or revocation after prior written notice.

Who can use your account: customs agency and liability

You can authorise someone else to use your deferment account number by signing in to your Customs Declaration Service dashboard and using the "Manage import duties and VAT accounts" service (GOV.UK). If an agent acts in its own name for an importer (indirect representation), it is jointly and severally liable for the customs debt and may be held responsible for the importer's deferment debts (GOV.UK); the liability differences are covered in Direct and Indirect Customs Representation.

Which data to provide in a CDS declaration

For a CDS (Customs Declaration Service) declaration paid from a deferment account, prepare at least: the importer's EORI number, the goods' tariff code (CN/HS), a customs value matching the commercial invoice, the country of origin, and the deferment account number as the payment method. If any element is missing, the system may reject the declaration before it is processed.

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Record-keeping and corrections

It is worth keeping import records in line with UK requirements: customs declarations for 4 years, and VAT records (including the commercial and transport documents that form part of them) for at least 6 years. Keep proof of payments from the deferment account, documentation of any amendments filed after release, and correspondence with HMRC in case of a post-clearance audit.

Want to check whether a deferment account makes sense for your imports? Get in touch — as a customs agency registered in CDS, with a UK EORI number, we help plan how duties are paid. Our charges are on one page only: how much does UK customs clearance cost.

Frequently asked questions