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Duty Deferment Account (DDA)
With a Duty Deferment Account, you benefit from better cash flow and easier cost management. Goods move through customs more efficiently, and your working capital stays in the business rather than tied up at the border.
At Goodwille, we handle the entire setup process for you and ensure your account is ready to use without delays. You get all the advantages of a DDA, with none of the administrative burden or compliance risks.
What Is a Duty Deferment Account?
A Duty Deferment Account (DDA) is an account with HMRC that lets you delay paying import VAT, customs duty and excise duty. Instead of paying these charges every time a shipment arrives, you pay them once a month by Direct Debit.
For businesses moving into the UK market, this makes importing far easier. Goods pass through customs more quickly because payment doesn’t need to be checked at the border, and all charges are grouped into one monthly statement.
Without a DDA, you must pay duty and VAT each time goods arrive – which can hold up deliveries, create extra work and put pressure on your cash flow.
The Benefits of a Duty Deferment Account
Alongside stronger cash flow and faster border clearance, a Duty Deferment Account also delivers several valuable advantages, including:
- Improved supply-chain efficiency
Faster clearance and predictable payment cycles mean smoother operations when importing goods. Your stock arrives when expected, helping you maintain reliable lead times and avoid unnecessary storage or demurrage fees. - Compliance benefits
A DDA supports consistent, transparent import practices. Monthly statements make it easier to track duties and VAT, stay organised and meet HMRC requirements without last-minute issues.
What Requirements Need To Be Met To Open a Duty Deferment Account?
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Any business that pays import duties in Great Britain can apply for a Duty Deferment Account – you don’t need to be based in the UK. Once HMRC approves your application, they’ll give you a Deferment Approval Number (DAN). You’ll use this number to set up your Direct Debit Instruction, which activates the account.
HMRC Guarantees & the Duty Deferment Account Guarantee Waiver
When applying for a Duty Deferment Account, HMRC may ask your business to provide a financial guarantee. This guarantee must come from a financial institution that’s based in the UK and regulated by the Prudential Regulation Authority (PRA).
What Is the Guarantee Waiver?
In many cases, you may not need a guarantee at all. HMRC offers a guarantee waiver, which removes the requirement for a financial guarantee if your business can show a strong compliance history and solid financial footing.
Using Your Duty Deferment Account for Deferred Payments
Once your Duty Deferment Account is set up, you can use it to defer a wide range of import charges that would normally need to be paid immediately at the border. These include:
- Customs duties
- Import VAT
- Excise duty VAT
- Excise duties (including Tobacco Products Duty)
- Levies under the EU Common Agricultural Policy
- Positive Monetary Compensatory Amounts under the Common Agricultural Policy
- Anti-dumping or countervailing duties imposed by the UK or EU
- Interest on customs debts
How Deferred Payments Work for Customs Duty and Import VAT
All customs duties and import VAT deferred in a calendar month are combined into one total amount. HMRC then collects this amount:
- on the 16th of the following month, or
- on the next working day if the 16th is not a working day
How Deferred Payments Work for Excise Duties
Excise duties work slightly differently. The accounting period runs from the 15th of one month to the 14th of the next, giving you roughly 30 days of credit. Payment is taken:
- on the 29th of that second month (or 28 February in non-leap years), or
- on the working day before if that date is not a working day
Get Started With Your Duty Deferment Account
Goodwille has enabled hundreds of overseas businesses to enter and operate in the UK. With a multilingual, culturally aware team and deep cross-border experience, we make your move into the UK market smoother and more secure.
We’re here to support your business and ensure your Duty Deferment Account is set up correctly and compliantly from day one.
Duty Deferment Account FAQ’s
We’ve answered the most common questions on Duty Deferment below.
What is an Excise Warehouse?
An excise warehouse is an HMRC-approved storage facility where excise goods (such as alcohol) can be held without paying duty immediately. Duty generally only becomes payable when you are releasing goods from the warehouse into free circulation.
What Do You Need to Apply for a Duty Deferment Account?
To apply for a Duty Deferment Account, HMRC requires a clear set of business and compliance details. You’ll need to provide:
- EORI number
- Name linked to your EORI
- Registered company number, if applicable (UK companies will use their Companies House registration)
- UK address associated with your EORI number
- Correspondence address for HMRC communications
- VAT number, if your business is VAT registered
- Details of company directors and key officials, including dates of birth
- Details of the person responsible for customs authorisations, including their practical customs experience
- Your estimated monthly deferred debt, covering the duty and VAT you expect to defer
Who Can Apply for a Guarantee Waiver?
To be eligible for a guarantee waiver, your business must meet HMRC’s conditions, including:
- No serious or repeated tax or customs issues in the last three years
- No serious criminal offences relating to your business in the last three years
- Positive net assets (excluding goodwill) at the time of application and for the previous three years (or for the time you’ve been trading)
- Net assets higher than the waiver amount requested if applying for more than £10,000
- Being established in the UK. You’re considered established if you’re incorporated or registered at Companies House.
What Happens if Your Duty Deferment Account Application is Rejected?
If HMRC rejects your application, they will inform you of the reason and explain your right to request a review or appeal. Rejections can delay your ability to import and HMRC may charge interest on late payments if duties cannot be deferred. At Goodwille, we work carefully through the requirements to prevent applications from being rejected.
Is a Duty Deferment Account a Direct Debit?
No, a Duty Deferment Account is not a Direct Debit. A Duty Deferment Account uses a Direct Debit to collect all deferred charges in one monthly payment.
Is Duty Deferment the Same as Postponed VAT Accounting?
No – they serve different purposes. Postponed VAT Accounting (PVA) allows businesses to account for import VAT on their VAT return instead of paying it when goods enter the UK. This improves cash flow, as the VAT does not need to be paid immediately.
A Duty Deferment Account, however, postpones payment of both VAT and most customs tax charges until the 15th of the following month. It also delays payment of customs duty, which PVA does not cover.
Meet our Head of Corporate Governance
Sarah Scott
Sarah is part of Head of our Governance Team providing additional support and advice including regulatory compliance matters. Sarah has a wealth of knowledge with a full and balanced understanding of client needs. She is also our data protection specialist and is on hand to advise on client data protection obligations.