1. Who can apply for this extension to the payment deadline? 

• Importers in the U.K. holding a duty deferment account who have not yet paid the deferred Customs duty and import VAT amounts due on 15th May or expect not to be able to pay future monthly deferment payments. 
• Importers in the U.K. who do not hold a duty deferment account and pay cash or an equivalent (except for non-registered importers). A guarantee may be required.

2. What are the requirements in order to be granted an extension/additional time to pay? 

• You must meet HMRC’s financial hardship test and be able to prove severe financial distress as a result of COVID-19. 
• HMRC’s approval is not guaranteed and any conditions and length of time offered will depend on your individual circumstances.

3. When to contact the relevant authorities to request an extension? - Immediately. This deferral is not automatic.

4. Take a proactive approach 

• You should consider this measure if you regularly import into the U.K. but do not expect to complete sales or receive payments from your customers in the short term so are experiencing cashflow difficulties.
• You should consider this measure to avoid HMRC suspending your duty deferment account if you expect to have to delay making payments. 
• Gather evidence that proves your financial distress and cashflow position.

5. How can we help?

• We can review your particular situation and assess whether you are in a position to benefit from the payment extension.
• We can help you gather enough evidence to be prove your financial distress and prepare sufficient explanation for HMRC’s consideration.  
• We can guide you through the negotiations with HMRC.
• We are up-to-date with the tax measures in place to mitigate COVID-19 impact. We can provide you with further ideas on how to unlock cash critically needed for your business.

Do you have any further questions? Contact our team today. 

A specialist team in indirect taxes within A&M Taxand are already assisting clients on COVID-19 crisis impact on their specific businesses and needs, therefore if you would like to discuss a particular case or more generally the technical considerations set out in the article in more detail, please reach out to any of the authors.