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What is
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a Deferment Account
A Deferment account is an account that a customer uses to record the duties for goods which need to be paid.
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You do not have to be holding stock in the warehouse to record a deferment account. You can have a deferment account which can be used for “duty deferring” this is when the stock holding customer is charging an alternative customer for the duty. |
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Deferment Account
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Options
There are three options
When adding a new customer the CREATE button appears on the BOND tab
The Create Menu from the menu options allows you to create a new deferment manually.
If the deferment already exists then use the navigation menu on the right side and search for the deferment you want to look at or edit.
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Delete button - You will not be asked to confirm the deletion of the currently selected customer. |
Deferments for Charging (No Stock)
If you wish to charge to a customer who is not holding stock in the warehouse this is known as “duty deferring” where you are charging the duty element of a duty paid order to an alternative customer.
You would setup a deferment account using this option but you should ensure that you have a copy of the C1207N or C1207S prior to using the “ADD CUSTOMER” button
Setup the customer details on the deferment account, this is NOT a cash deferment
EORI, VAT Number and Email address are important and need to be filled.
Give it an easy to remember name such as TESCO, BOOKER (deferment name)
Deferment number needs to be the HMRC issued deferment account.
Save the account
PRESS the ADD CUSTOMER button
Do not select the customer as a stock owner.
Based on whether you have a C1207S or C1207N enter whether the ability is unending or whether specific dates.
Enter the stock holding customer account which is allowed to use the deferment
Save the record.
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You can now enter an order and on the order options page remove the default deferment account, press F11 and you will see this new account as an available account which the stock holding customer is able to charge to. |
Field Use Information
Most fields in this section are self explanatory however please note the following fields
Field Name | Notes |
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Deferment Account | Generally this would be set to your customers account code |
where your using this for charging duty purposes only (and they do not hold stock) then use a suitable code to identify this account. | |||
Deferment Number | For Government duty accounts - this is the deferment number of your account. It is 7 digits long For Cash duty accounts - you will have a virtual account number here which the system generates which is seven characters long starting with your customer code followed by 4 number. | ||
Email Address | This is the address which is used to send the following information
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Cash Deferment (Virtual Accounts)
What is a cash deferment
This is a stock holding customer who does not have a real government deferment account, we provide them with a virtual account which is known as a “cash deferment”
Cash Deferments are generally produced on a W5 document for submission to HMRC and for payment immedaitely upon submission.
However within Vision Bond you will have the opportunity to move this cash W5 account to be warehouse keeper paid on the warehouse keeper deferment, in which case a W5D against the warehouse keepers deferment would be generated and submitted.
Using Cash Deferments
This area will only be available if the account you are setting up is a cash account.
The surcharge is the amount you will be charging the customer for the use of a cash deferment account.
Optional Finance extract is available - this is not a standard module, but where this is enabled the Vision Bond system will provide you (in addition to the paper report) an extract which you can then load onto your finance / accounting system, if you are using this option then the account code must be completed here as well as the nominal account code this transaction will use on the finance system.
The Direct Debit option - this will add On the customer record you need to ensure you have not ticked “Deferment Agreement” as cash deferment should not have this selected.
Cash Deferment Type Options
Options | Explanation |
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Credit | This is where you offer the customer credit for their deferment and will not be notifying them of payment collection using direct debit |
Direct Debit | This is similar to the credit option however this adds an additional notification onto the duty demand (which is created at Vision Bond day end operation) regarding the payment of the deferment by direct debit. |
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Pre- |
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Payment | configure a cash deferment for pre-payment, which results in all orders using the deferment being put on hold awaiting payment. The existing 'held order email’ has been updated to display the pre-payment required so users can generate this
Users can then take the order off hold once payment has been obtained. |
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| Warning |
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In order to ensure the duties paid are correct and do not change once the order is picked, these types of orders will result in a ‘soft pick’ which will pre-allocate rotations to the order based on the existing FIFO calculations at the time the order is saved, therefore saving of orders for prepayment deferments is more resource-intensive and therefore slightly slower. |
Surcharges
The surcharge is the amount you will be charging the customer for the use of a cash deferment account.
This is recorded as a % of the duty amount you are deferring on their behalf.
Add Customer button
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By clicking the button the above form will open up allowing you to specify who can use this deferment account.
Along with the demand a seperate invoice is generated to the customer which can be viewed in the expand section below
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In general this service can be seen as a charge valid of sales tax (VAT) however some warehouses have argued that this is a financial credit agreement which is outside the scope of VAT. There is an option on the form to allow you to choose whichever method you wish to use.
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If you utilise the Vision Bond extract for finance system you must setup the nominal code on this form before you use this service charge feature. If you are only raising invoices for the service charge and manually posting them then there is no need. |
Optional Modules
Optional Finance extract is available - this is not a standard module
When this is enabled the Vision Bond system will provide you (in addition to the paper report) an extract which you can then load onto your finance / accounting system, if you are using this option then the account code must be completed here as well as the nominal account code this transaction will use on the finance system.
This will provide an output for the
Customer amount they owe for duty relating to the orders they have cleared
Customer amount they owe for the service charge
Supplier amount which you would be due to pay customs for the customer duty
Add Customer button
In order to use a deferment account the customer has to have the authority to do so and in this form you will grant the authority as either the
Stock Holding customer OR
A user of the the deferment account.
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This is the instruction as to who will be able to charge the deferment, you will need to enter the customer code and customer name and then you need to decide whether this is a “Owned” or “Customer using deferment” addition to this deferment.
Owner
If it is an owner then nothing else is required and you can ADD customer.
Customer Using the Deferment
If it is somebody using the account then based on the C1207 form you have you need to decide
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and enter the appropriate information before pressing the ADD Customer button.
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Frequently Asked Questions
What to do if a customer runs out of credit on HMRC and wants to use a cash deferment?
Setup a Cash Deferment for that Customer marking the Stock holding accounts which will use it.
On the customer record, change the customer default account to the cash account WHEN YOU NEED TO CHANGE TO CASH DEFERMENT.
Return it back to the HMRC number whenever you finish using it.
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