A CCG issued by HMRC must cover twice the maximum of all customs and excise duties to be incurred by the holder of the guarantee in a given month. This includes both duty payments (e.g. deferment) and “suspended” duty charges (such as Inward Processing).
The CCG must be issued by an approved UK Bank or Financial Institution.
A CCG can be increased, either permanently or for a short period on application to HMRC.
The CCG application process is a two-stage procedure involving application to HMRC for approval to hold the guarantee followed by completion of the guarantee by the applicant’s financial institution (usually their UK bank) which is submitted directly to HMRC by the institution.
The application takes a minimum of 6 weeks and needs to be completed before a duty deferment facility can be obtained.
The amount of guarantee required can be reduced by means of a “waiver” which must be applied for to HMRC. For example, if the guarantee is for £100,000 (i.e. £50,000 per month) the guarantee waiver may reduce the bank guarantee requirement to £70,000, £50,000 or even zero (30%, %0% or 100% waiver approved). Waivers can be given more-or-less automatically to holders of Authorised Economic Operator (AEO) approval from HMRC, and also to importers whose total duty charges is expected to be less than €1,000 (about £850) per month, for example.