What is a Deferment Account

A Deferment account is an account that a customer uses to record the duties for goods which need to be paid.

There are two types of deferment accounts

• Government provided account - where you have your account setup with the relevant tax body and you pay them directly.

• Cash account - where the warehouse are paid the duty and they will then transfer payment to the government on your behalf.

Deferment Account Options

There are three options

1. When adding a new customer the CREATE button appears on the BOND tab

2. The Create Menu from the menu options allows you to create a new deferment manually.

3. 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.

When you open the deferment account form you should see something similar to the example below.

Open

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

1. Setup the customer details on the deferment account, this is NOT a cash deferment

   1. EORI, VAT Number and Email address are important and need to be filled.

   2. Give it an easy to remember name such as TESCO, BOOKER (deferment name)

   3. Deferment number needs to be the HMRC issued deferment account.

   4. Save the account

2. PRESS the ADD CUSTOMER button

   1. Do not select the customer as a stock owner.

   2. Based on whether you have a C1207S or C1207N enter whether the ability is unending or whether specific dates.

   3. Enter the stock holding customer account which is allowed to use the deferment

   4. Save the record.

Field Use Information

Most fields in this section are self explanatory however please note the following fields

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.

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

Examples of Email and Attachment

Open

Open

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.

Along with the demand a seperate invoice is generated to the customer which can be viewed in the expand section below

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.

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.

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

• Unlimited use (C1207N)

• Specific dates use (C1207S)

and enter the appropriate information before pressing the ADD Customer button.

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.

• Some examples of Deferment account setup:

  • The Deferment account VINCER is used by the Stock Holding account VINCER (the codes can be the same). 

  • If VINCER has a second account this can also be added into the Deferment Owners, they MUST own the Stock.

  • If VINCER give another Stock Holding Customer permission to use this Deferment then they MUST appear in the section marked "Customers using the deferment"

  • The Stock Holding account VINCER must only appear on this HMRC Deferment account.