HM Revenue & Customs is giving U.K. importers struggling with the economic effects of the coronavirus pandemic more time to pay their April customs duties and import VAT.
The agency announced April 10 that importers facing severe financial difficulties that cannot pay their import duties or VAT by the April 15 deadline because of the pandemic can request an extension. With the payment deadline fast approaching, HMRC's contact lines will remain open during the Easter holiday weekend.
The application process is open to importers regardless of whether they have a duty deferment account, but those whose payments are not covered by that type of account will not be guaranteed more time.
Robert Windsor, executive director of the British International Freight Association, said in an April 10 release that the group welcomes the announcement. However, he said, “it must be noted that each case will be considered on its individual merits, and that duty/VAT must be paid in full at an agreed date."
"Excellent news from HMRC for importers worried about finding the money to pay import duty and VAT due to cash flow issues caused by COVID-19," Morley Consulting said in an April 10 posting on its website.
George Zaharatos of KPMG noted during an April 10 KPMG webcast that the United States has yet to offer a similar option to its importers. “In the U.S., there is no deferral of duties per se," he said, adding that most U.S. importers are "trying to figure out how to defer duties using traditional mechanisms, versus one special blanket deferral" to stay afloat during the pandemic.
Among the options being considered by some U.S. companies is the warehousing of imported goods in foreign trade zones, which allow for the deferral of customs duties, taxes, and fees until the goods enter the United States for consumption, Zaharatos said.