Oils deferment security turns discretionary as guarantee caps removed

Oil companies deferring hydrocarbon-oils excise duty face a redrawn security and administration picture. The Deferment Approval Number lets an oil company defer duty on product removed from duty suspension during an accounting period running from midday on the 15th of one month to midnight on the 14th of the next, with payment on the last business day of the latter month — a cash-flow facility of up to six weeks. The period wording itself is newly precise, and the surrounding requirements have moved further.

Security for deferment is no longer stated as mandatory.GOV It may be required, in the form of a guarantee underwritten by an approved bank, insurance company or other approved financial institution.GOV The guarantor class is thus wider than the previous guarantee-society framing, and companies outside the approved list that wish to stand surety apply to the relevant HMRC team. The new page no longer states the £9.5 million maximum guarantee limitGOV, nor the paragraphs describing partial security for traders averaging over £5 million of liability a month and deferment numbers in the 7605 series. The guarantee mechanics that remain are material: the guarantor covers every sum deferred up to the holder's overall maximum for the period, and can be liable for up to twice the monthly guarantee figure, because a trader can defer up to the limit in one period and again in the next before paying. The former references to the Central Deferment Office at Southend and to MORC Newcastle's HO10 role are replaced with a general instruction that deferment administration sits with HMRC operational teams and current responsibilities should be checked.

Two further simplifications follow. Authority for a warehouse-keeper to complete deferment documentation and charge duty on the holder's behalf for product in independent warehouses is now simply given in writing, with no prescribed C1207 form, for retention and production to HMRC on request. And the Central Accounting Point concept is spelled out: a holder's liability may span several approved premises, but the total deferred is calculated at the CAP, which must specify the warehouses used for home-use removals before the guarantee is used. Monitoring duties at the CAP and at each warehouse are unchanged and continue to follow Notice 179.

The Excise Notice 179 position confirms the direction of travel on security: deferment may need a guarantee, HMRC may authorise reduced or nil security for traders meeting the criteria, and where a guarantee is still needed for fuel duty it must cover one month's maximum liability up to £9.5 million. Holders who anticipate exceeding guarantee levels are referred to Notice 179 paragraph 10.10.

Legal basis: Excise Duties (Deferred Payment) Regulations 1992 (SI 1992/3152); Excise Notice 179.