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NCTS Guarantee Reference Amount - Update

HMRC is writing to inform you of an update to the National Computerised Transit System (NCTS) that may affect how traders need to make their transit declarations from the 4 May onwards.

NCTS is a system of electronic declaration and processing that traders must use to submit Common Transit declarations.
https://www.gov.uk/guidance/using-the-new-computerised-transit-system-to-move-goods-across-the-eu-and-efta-countries

When making a declaration into NCTS for Transit movements it is a requirement to provide an accurate guarantee reference amount in NCTS declarations, in line with the Common Transit Convention (CTC).

The Guarantee Reference Amount is the amount of duties that are suspended on the transit movement. Traders must provide a guarantee against this amount.

They can either use an individual guarantee against each movement or they can use a Customs Comprehensive Guarantee (CCG) to guarantee multiple movements.

If they use a CCG then NCTS keeps track of the amount of guarantee that they have used and does not allow them to start new movements unless they have enough unused guarantee.

What is changing

When making a declaration into NCTS for Transit movements traders are required to provide an accurate guarantee reference amount.

The UK NCTS system was upgraded on 14 January, so that if traders do not enter a value, then the NCTS system will enter a “default” amount in their declaration. This amount is set by the Common Transit Convention at the sterling equivalent of 10,000 euros for each transit movement.

However, many businesses were unable to enter an accurate guarantee reference in their transit declarations. So HMRC temporarily reduced the default value of 10,000 euros to £1 so businesses could still make transit movements.

This was only a temporary measure until businesses and software developers could ensure that they were able to enter accurate Guarantee Reference Values into their declarations and HMRC will be resetting this value to the sterling equivalent of 10,000 euros on the 4 May.

Traders must now ensure that they are able to enter accurate Guarantee Reference Amounts in all of their transit declarations. If they do not enter a value, NCTS will automatically add a value of 10,000 euros in sterling, and will hold 10,000 euros of their guarantee against the movement. NCTS keeps track of the amount of the guarantee that traders have used and does not allow them to start new movements unless they have enough unused guarantee.

The changes being made in order to comply with CTC requirements have also been published on Gov.uk:
https://www.gov.uk/government/publications/the-new-computerised-transit-system-supporting-guidance/ncts-guarantees

What are the next steps for traders

Update their software

Traders must ensure that they can enter an accurate guarantee reference amount with each transit declaration. If they are able to enter a guarantee amount then they should already be doing so.

If traders use software to make their transit declarations into NCTS they must make sure that they have applied any updates from their software provider to allow them to make this entry.

If they cannot enter an accurate guarantee reference amount using their software, then they should contact their software provider immediately to upgrade their software.

If traders are starting movements in Great Britain, then they may want to make their declarations manually using the NCTS web portal until their software has been upgraded.

Enter a guarantee reference amount in every declaration.

Traders must ensure that they are entering an accurate guarantee reference amount with each transit declaration.

If their NCTS software does not enter this amount in their declaration automatically then they must make sure that they enter it manually.

In most cases, traders should be able to calculate an accurate guarantee reference amount, based on the value of the customs and other duties on the goods that are suspended whilst they are in transit. Traders must enter this value as the guarantee reference amount. If they are using software to make their transit declarations into NCTS a value below £1 will not be accepted.

In some exceptional cases, it may not be possible to calculate an accurate amount at all. In these cases only, traders may enter a value of 10,000 euros in sterling. They should enter this amount into NCTS themselves if they are able to.

Make sure their guarantee is large enough

Traders must continue to monitor their actual guarantee usage and ensure that they have sufficient guarantees in place to cover all of their open transit movements. This requirement applies regardless of whether or not they are able to enter an accurate amount on NCTS.

If traders reach the limit of their guarantee, then they will not be able to start any new movements, until either some of their open movements are closed and the guarantee released, or they arrange for their guarantee limit to be increased.

Increase their guarantee if they need to

If traders reach their limit of guarantee, then they will not be able to start any new movements, until either they apply for their guarantee limit to be raised, or until open movements are closed and the guarantee released.

To increase the amount of their guarantee, traders should follow guidance on how to apply for a Customs Comprehensive Guarantee including considering applying for a waiver using form CCG1F.
https://www.gov.uk/guidance/apply-for-a-customs-comprehensive-guarantee-to-cover-customsdebts



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