Duty Deferment Account UK 2026 – How to Defer Customs Duty Payments

What is a Duty Deferment Account (DDA)?

Duty Deferment Account (DDA, also known as Deferred Duty Account) is an HMRC-approved mechanism allowing importers to defer payment of the following customs charges:

• Import Duty — customs duty on imports,
• Import VAT — value added tax collected on import (20% standardly),
• Excise Duty — excise duty (for alcohol, tobacco, fuel — where applicable).

Without a DDA every import clearance requires immediate payment — goods will not be released until HMRC confirms receipt of funds. With a DDA, HMRC releases goods immediately and the charges accumulate throughout the month, then are collected automatically on the 15th of the following month by Direct Debit.

A practical cash flow example

Imagine a company importing goods worth £500,000 per month to the UK, with 5% duty and 20% VAT. Monthly charges:

• Duty: £500,000 × 5% = £25,000
• Import VAT: (£500,000 + £25,000) × 20% = £105,000
• Total: £130,000

Without DDA: the company pays these amounts at each of ~30 clearances throughout the month, locking up working capital for 1–2 days per transaction.
With DDA: the company holds the full £130,000 throughout the month and pays once on the 15th of the following month. Effective trade credit: 2–6 weeks.

Who can obtain a DDA?

HMRC grants a DDA to companies meeting the following conditions:

1. Active GB EORI — an Economic Operator Registration and Identification number registered in the UK.
2. No tax arrears with HMRC (VAT, duty, income tax).
3. UK bank account — required to set up a Direct Debit. HMRC does not accept foreign bank accounts.
4. Ability to provide a guarantee — standardly a bank or insurance guarantee is required.
5. Minimum 3 months of import history — although HMRC may accept applications from new importers with appropriate business justification.

How to apply for a DDA — form C1201

Step 1: Prepare the documentation

Before submitting the application gather:

• GB EORI number,
• UK bank account details (sort code, account number),
• recent financial statements (3 years, if available),
• estimated monthly import value and the amount of duty/VAT due,
• guarantor details (bank or insurer).

Step 2: Submit form C1201

Form C1201 (Application for a deferment account) is submitted via the HMRC Online Services portal or by post. The form covers:

• Section A: applicant details,
• Section B: information on import activity (estimated value, number of clearances/month),
• Section C: bank or insurance guarantee details,
• Section D: bank account details for Direct Debit,
• Section E: application for a possible Guarantee Waiver.

Step 3: Set up a Direct Debit

Alongside form C1201 you must set up a Direct Debit in favour of HMRC Customs on a UK bank account. Without an active Direct Debit the DDA account will not be activated.

Step 4: Await the decision

HMRC typically processes DDA applications within 15 working days. Upon a positive decision you receive a DAN (Deferment Approval Number) — a 7-digit code entered in the "Method of Payment" field of every import declaration in CDS.

What guarantee amount is required?

Standardly HMRC requires a guarantee equal to the peak single-month customs liability. Example:

• If in your worst month your duty and import VAT amounted to £50,000 — the guarantee should cover at least £50,000.
• Cost of such a bank guarantee: approx. 2–3% per year = £1,000–£1,500/year.

Guarantee Waiver

HMRC may grant a Guarantee Waiver — full or partial exemption from the guarantee — to operators meeting:

• AEO-C (Authorised Economic Operator Customs) status,
• at least 3 years of UK import history without violations,
• no tax arrears throughout that period,
• implemented internal customs compliance procedures.

DDA payment schedule

If the 15th falls on a weekend or bank holiday, HMRC collects payment on the next working day. The Direct Debit is collected automatically — you do not need to remember to make the payment.

DDA and import VAT — the special PVA route

Since 1 January 2021 the UK has operated Postponed VAT Accounting (PVA) — a mechanism allowing importers to account for import VAT directly in their UK VAT return instead of paying it at clearance. PVA is available to all VAT-registered importers in the UK without needing a DDA.

The difference:

• DDA: defers import VAT payment to the 15th of the following month (requires a guarantee).
• PVA: eliminates the need to pay VAT at import entirely — VAT is accounted for in the quarterly VAT return (no guarantee required).

Most UK companies use PVA instead of DDA for VAT, and a DDA only for import duty itself.

Related articles

• Duty and VAT on UK imports — how to calculate?
• UK Customs Guarantee (CGU) — how to get one and what it costs