The Duty Deferment approval allows an oil company to defer any
excise duty liable on product removed from duty suspension, during
an accounting period (15th of one month to the 14th of the next)
until the last business day of the latter month.
The deferment facility is of great financial advantage to an
oil company as it means they are not required to pay the duty on
product they remove from duty suspension for up to six weeks.
Security for deferment of duty must be provided in the form of a
guarantee underwritten by an approved guarantee
society. Most banks and insurance companies have this approval.
(This is overseen by A&CG 1A, Southend-on-Sea. Guidance A1-2
also refers).
Companies who are not on the approved list but wish to stand
as surety for deferment guarantees may apply to ASD Branch 8C to be
accepted.
The guarantor agrees to cover every sum deferred up to the
overall maximum in any accounting period. This is the deferment
holder’s limit and must be sufficient to cover all deferrable
excise liabilities. The guarantors can be liable for up to twice
the monthly amount shown on the guarantee. This is because traders
may defer up to their guarantee limit in one accounting period and
then again in the next period before making any payment.
Those traders whose average liability exceeds £5 million
for an accounting period may apply for partial security (see Public
Notice 179). Partial security traders can be identified by a
deferment approval number in the series commencing
“7605”.
A maximum guarantee limit of £9.5m applies.
Note: This applies only to traders with uncapped
guarantees, i.e. those with guarantees of less than £9.5
Million.
A deferment holder’s liability may be spread over a
number of approved premises from which oil is to be delivered, but
the total amount deferred will be calculated at the CAP. The CAP
must specify which warehouses are to be used for removing product
to home use under the duty deferment arrangements before using this
guarantee.
In respect of product stored in independent warehouses the
deferment holder may authorise the warehouse-keeper(s) concerned to
complete the deferment documentation and charge duty on their
behalf.
Authority is to be given on appropriate C1207 form and sent
to the warehouse-keeper(s) involved, for retention and production
to us on request.
At the CAP approved traders must monitor deliveries from all
delivery warehouses, net of any allowable credits, plus or minus
any adjustments advised by the approved person and the overall
guarantee limit throughout each deferment period, in accordance
with
Public Notice 179.
Individual warehouse-keepers must also monitor the guarantee
allocation(s) in respect of their warehouse and report to the
relevant CAP when it is anticipated that the operating guarantee
level will require adjustment.
Guidance for approved traders who anticipate exceeding
guarantee levels should refer to Public Notice 179 paragraph
10.10.
