A customs guarantee is an agreement to cover a customs debt that has or will arise from certain customs procedures. This is known as an actual or potential debt.
Once you’re authorised, you’ll need to provide a guarantee to enter goods into a customs procedure and defer customs duties. What kind of guarantee you need, and how it works, depends on the circumstances. You can use:
- an individual guarantee – to make a one-off application for a special procedure, up to 3 times every 12 months
- a CCG – to apply for new customs authorisations and approvals
You can use an individual guarantee when you apply to use a special procedure as a one-off on your customs declaration. You can’t do this more than 3 times in a 12-month period.
You must give an individual guarantee to cover 100% of the Customs Duty. There are no reductions or waivers available for these types of guarantees, even if you have Authorised Economic Operator for Customs (AEOC) status.
You can give your guarantee using a:
Use a deed of guarantee
Your guarantor must be a bank or insurance company that has HM Revenue and Customs (HMRC) approval. They need to provide the guarantee on form C&E250 before the goods are released.
Most banks and insurance companies have approval to act as a guarantor. Call the HMRC National Temporary Admissions Team on 03000 588 538 if you need to check a guarantor.
General Guarantee Account
Unless the Tariff says otherwise, a guarantee account can be used to secure any charges for which a deposit would normally be needed, including:
- VAT on import goods
- customs duties
- excise duties
- charges imposed under the Common Agricultural Policy of the EU
- Anti-Dumping or Countervailing Duties imposed by the EU
You can get more information in Notice 102: General Guarantee Accounts.
Customs Comprehensive Guarantee (CCG)
You need to hold a CCG authorisation if you want to apply for new customs authorisations or approvals that defer or suspend the payment of duty.
When you need to hold a CCG
Under the Union Customs Code (UCC), from 1 May 2016 you need to hold a valid CCG if you want to apply for new customs authorisations and approvals. You’ll also need this if you have a duty deferment account relating to customs duties to defer or suspend the payment of duty.
If you have a Customs Community Code (CCC) authorisation with no end date, you have until 30 April 2019 to get your authorisation or approval reassessed by HMRC. You’ll need to have a CCG in place from 1 May 2019.
From 1 May 2016 you’ll need a UCC authorisation and a CCG if you want to make retail sales in a customs warehouse.
You can continue to use any comprehensive transit guarantees, reductions, or waivers issued before 1 May 2016 until the transit guarantee authorisation is reassessed by HMRC.
You can also continue to use Simplified Import VAT Accounting Scheme authorisations after 1 May 2016 until the authorisation is reassessed.
You need to apply for a guarantee straightaway for any new authorisations and approvals for customs special procedures granted on or after 1 May 2016.
- inward processing
- Outward Processing Relief with prior importation
- temporary admission, with some exceptions
- temporary storage
- customs warehousing
Apply for a CCG if you need a new deferment account to cover your customs duties. You won’t need to provide the security until you’ve been told by HMRC that you’ve been authorised to have a customs duty deferment account.
You don’t need a CCG if you only operate an Excise Payment Security System account and don’t have any customs activities.
How to apply for a CCG
Apply for a CCG using form CCG1 and questionnaire CCG1a.
You’ll need to provide calculations to support the guarantee reference amount (guarantee limit), correctly apportioned between all your actual and potential debts. Your total reference amount should account for:
- duty deferment account
- excise-only activities, if they’re part of International Trade activities
- potential debts applied to any Customs Special Procedures
- temporary storage facilities
- goods declared using a Customs Freight Simplified Procedures declaration (covering the period between the initial declaration and the supplementary declaration)
It can take up to 120 days to authorise a CCG.
Conditions for getting a CCG
To get a CCG, you need to:
- be established in the EU
- have no serious or repeated infringements of customs or tax rules
- have no record of serious criminal offences related to your business activities
Your past 3 years will be checked against these conditions. If you’ve not been established for 3 years then you’ll be assessed against the remaining conditions on the available information and records.
HMRC will carry out assurance checks before issuing a CCG authorisation. This will tell you if you’re entitled to reductions and waivers and what level of CCG you’ll need to get from your guarantor(s). You’ll then need to provide the securities to HMRC using either:
You must get your financial guarantee from one of the approved financial institutions:
Not meeting the conditions
Applying for a CCG and not meeting the conditions
If you don’t meet the conditions when you apply for a CCG there are other ways to secure or pay for the customs debt. You can use an individual guarantee or other methods of payment such as cash or credit cards.
No longer meeting the conditions after a CCG is in place
If your application was successful and you have a CCG, you must make sure you continue to meet the conditions.
If your circumstances change and you fail at any time to meet the conditions associated with the guarantee waivers or reductions, you’ll no longer be entitled to receive these benefits and will need to amend your CCG amount.
It’s your responsibility to:
- calculate the reference amount
- monitor the reference amounts against customs activities
- ensure enough coverage by the appropriate guarantee method
- consider other methods of payment, for example using an individual guarantee for one large transaction to avoid going above the CCG
- tell HMRC if you need to amend your guarantee level
HMRC will regularly check the use of the guarantees in place and will tell you if guarantee levels are wrong.
CCG waivers and reductions
There are some circumstances where a CCG can be reduced or waived. The guarantee requirement could be reduced to 50%, 30%, or a waiver for potential debts. When you complete questionnaire CCG1a you need to select the level of guarantee you’re applying for. HMRC will assess your eligibility for these.
A CCG may be waived when your potential debt reference amount for the import or export duty to be secured doesn’t go over the current statistical threshold, which is set at 1,000 euros or £873 in the UK. This amount is reviewed on a regular basis.
The waiver will apply for full authorisations only in the following customs procedures:
- inward processing
- customs warehousing
- temporary admission
- temporary storage
- Customs Freight Simplified Procedures
These rules also apply to goods declared by post under the universal postal provider (for example, Royal Mail Group or Parcelforce).
This doesn’t apply to individual transactions entered to a special procedure using the authorisation by declaration special procedure, such as simplified inward processing.
If your reference amount for each of the customs procedures under potential debt is equal to or less than the statistical threshold you don’t need to include it on your CCG. You’ll still need to fill in a CCG1 form if you need to cover the actual debts (duty deferment).
You must tell HMRC of any changes that may affect your authorisation. You must contact your supervising office if you benefit from a waiver and the amount of Customs Duty suspended changes and goes over the threshold.
Authorised Economic Operator for Customs (AEOC) status: CCG waivers or reductions
From 1 May 2016, only businesses with AEOC authorisation are eligible for the reduction on their deferment guarantee. As an AEOC you would also be eligible for a full waiver for the potential debt.
If you have AEOC status you’ll be eligible for a reduction to 30% of actual debts – for example, deferment accounts.
Potential debts guarantee can be reduced to 0%.
If an AEOC authorisation is suspended or revoked by HMRC, or withdrawn by the business, you’ll need to meet the full guarantee requirements as you’ll no longer be entitled to these benefits.
Becoming an AEO to get a guarantee reduction or waiver
You’ll need an AEOC authorisation to reduce the guarantee covering the payment of actual debts. This will reduce the level of deferment guarantee.
You don’t need an AEOC authorisation to get a waiver or reduce the guarantee for potential debts (for example, goods held in duty suspension), but certain AEO conditions will still have to be met.
Changes affecting a deferment guarantee and account
A deferment account can continue if it was in place before 1 May 2016 and there’s no significant changes to your circumstances. You can see examples of significant changes that mean you’ll have to apply for a new authorisation in Customs Information Paper 4 (2017): Union Customs Code (UCC) Reauthorisation triggers.
HMRC doesn’t class the following as significant changes:
- a change to your Deferment Account Level
- a change to your Deferment Guarantee Level
- a change of guarantor
As soon as you’re aware of a significant change you must complete a CCG1 form. HMRC will then re-assess the criteria to keep the deferment facility. You’ll need to meet the UCC guarantee conditions to keep the deferment facility.
If there is a change and it affects another customs authorisation held by you, the new CCG arrangements will apply to the goods covered by that authorisation.
If your deferment account only covers excise and related charges with no customs duty, there won’t be any impact on your account under the UCC changes.
Joint Contractual Liabilities (JCL)
You can consider using a JCL for potential debts. This is an alternative to a guarantee secured by a financial institution, and must be provided by a legal entity established in the EU.
A JCL can only cover potential debts. You can have:
- one JCL to cover all potential debts
- multiple JCLs covering different customs activities
The third party legal entity acting as the guarantor for the JCL will need to meet the conditions covered in this guide. They’ll also need to provide financial accounts covering the last 3 years.
A JCL can’t be used to cover the actual debt, as this still needs to be covered under the CCG. JCLs can only cover potential UK debts. They aren’t available for cross member states approvals.