What is a Revenue & Customs Bond?
Basic Meaning: A customs bond acts as insurance (not an insurance policy) to ensure that the government receive payment for duties and tax on your import.
Duty Deferment guarantee – a guarantee to Revenue and Customs for the payment of duty and taxes. A Deferred Payment authorisation allows traders to defer payment of duties and taxes. In all instances lodgement of a guarantee and compliance with the conditions of the authorisation is required. The authorisation allows the approved trader to pay the duties/taxes due by direct debit on a date in the month following the transactions. Excise Traders operating from a warehouse must operate on a deferred basis only.
Warehouse Bond – a guarantee required by Revenue & Customs for bonded warehouses. A bonded warehouse (bond) is a secured area where dutiable products are stored before paying duty. The warehouse can be run be publicly owned by the government or privately owned. If the building is privately owned a customs bond must be arranged.
See Revenue for further guidance.
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Who Is a Customs Bond For?
Any Business that imports products for commercial use are required to have a customs bond.
When the goods are imported into the country they are stored in a bonded warehouse (no duty payment). The bonded warehouse is either publicly owned by the government or a privately owned. If your goods are stored in a privately owned warehouse you must arrange a customs bond agreement
Why Do You Need a Customs Bond?
If you haven’t arranged a customs bond you could possibly experience delays and fines with your import. The bond should always be included in your pricing for importing products. Most shipments will not clear customs without a customs bond authorized by a company that has (HMRC) HM Revenue and Customs Approval.
One benefit of using a customs bond is that you can defer the duty payment for up to 45 days to give you a cash flow advantage. This can be extremely useful for minimizing cash flow pressures whilst waiting for import goods.