Introduction to Intrastat

The information collected by the Intrastat system is a key component for Balance of Payments (BOP) and National Accounts (NA) data, which is regarded as an important economic indicator of the UK’s performance.

The Office for National Statistics (ONS) uses the monthly trade in goods figures collected by HMRC together with the trade in services survey to produce the BOP and NA figures.

The Bank of England uses monthly trade data as part of its key indicators for gauging the state of the UK and world economic environment to set interest rates each month.

Government departments use the statistics to help set overall trade policy and generate initiatives on new trade areas.

Beyond the UK, trade statistics data are used by the EU to set trade policy and inform decisions made by such institutions as the European Central Bank, the United Nations and the International Monetary Fund.

The commercial world uses statistics to assess markets both within the UK (for example, to assess import opportunities) and externally (for example, to establish new markets for its goods).

What is Intrastat?

Intrastat is the name given to the system for collecting statistics on the trade in goods between the UK and EU member states.

The requirements of Intrastat are similar in the UK and all EU member states.

Intra-EU trade statistics are compiled from information provided by those businesses required to provide Intrastat declarations and estimations made using information on the VAT Return.

Be aware that:

• the supply of services is excluded from Intrastat
• you must not include the supply of services in boxes 8 and 9 of the VAT Return
• only movements which represent physical trade in goods are covered by Intrastat, although there are some movements that are excluded
• the close link with the VAT system is an essential feature in complying with Intrastat and also provides a means of checking the information supplied

Who has to submit Intrastat returns?

All VAT registered businesses must complete 2 boxes (8 and 9) on their VAT Return showing the total value of any goods supplied to VAT registered customers in EU member states (known as dispatches) and the total value of any goods acquired from VAT registered suppliers in EU member states (known as arrivals).

In addition to this, larger VAT registered businesses must supply further information each month on their trade in goods with EU member states.

If you dispatch goods to EU member states or receive arrivals of goods from EU member states with a value exceeding a legally set threshold, then you must submit the additional information. To do this you use a form known as an Intrastat Supplementary Declaration (SD), which you need to submit electronically.

The thresholds are reviewed annually, with any change normally announced towards the end of the preceding year. Changes will only apply from the beginning of a calendar year and you must make sure that you operate according to the threshold level currently set.

Businesses not registered for VAT and private individuals who move goods within the UK or EU have no obligations under the Intrastat system.

How you complete your intrastat return depends on whether your Arrivals (purchases or imports) or Dispatches (sales or exports) with other European Union (EU) member states are above or below the thresholds for the calendar year.

Below the intrastat thresholds

If your Arrivals or Dispatches are below the thresholds, all you need to do is fill in boxes 8 and 9 of your VAT return:

• in box 8 record the value of any goods dispatched to destinations in other EU member states
• in box 9 record the value of any goods arriving from other EU member states

The values should exclude any tax or duty but include any freight or insurance charges where they form part of the invoice or contract price of the goods.

Above the intrastat thresholds

If you exceed the thresholds, in addition to filling in boxes 8 and 9 of your VAT return, you must also submit a Supplementary Declaration (SD).

What is the intrastat deadline?

Intrastat declarations must be submitted on a monthly basis.

Complete and accurate declarations must be received by the 21st day of the month following the reference period to which they relate.

For example, declarations for the March period must be received by the 21st of April. The reference period is normally a calendar month. If you use non-standard VAT periods, the time limit operates from the end of the special period.

Declarations must be made for all goods covered by the reference period, even if no invoice has been received.

It’s important that you comply with this time limit. Failure to do so could make you liable to legal proceedings.

The exemption threshold for:

• arrivals is currently £1.5 million
• dispatches is currently £250,000

The rules for submitting Supplementary Declarations (SDs)

The threshold applies on a calendar year basis, that is, January to December. Once you’ve exceeded the threshold you must continue to submit SDs until the end of the calendar year.

These provisions apply separately to arrivals and dispatches. If your business exceeds the threshold for arrivals of goods, but not for dispatches, you only have to complete SDs for arrivals. If your dispatches (and not your arrivals) exceed the threshold, you only have to include dispatches on your SDs. If both arrivals and dispatches exceed the threshold, SDs must be submitted for both.

Once you’ve established that you’ve exceeded the threshold for arrivals or dispatches you must contact the Intrastat Enquiries Team, you can email them at: intrastatenquiries@hmrc.gov.uk, stating the month in which you exceeded the threshold and whether it was for arrivals, dispatches, or both. HMRC will confirm the start date and advise you of any special arrangements.

At the end of each year your obligation can change. This will depend on whether or not your EU trade for the calendar year just ending has exceeded the threshold set for the following year. If it has exceeded this threshold you must supply SDs throughout the following calendar year.

For example:

• the arrivals threshold for 2014 is set at £1.2 million
• a business exceeds the threshold in October 2014 and starts submitting arrivals SDs from 1 October 2014
• the arrivals threshold for 2015 increases to £1.5 million
• the businesses trade is above the new arrivals threshold set for 2015 at the end of December 2014
• therefore the business must continue to submit arrivals SDs throughout 2015

Any change in the threshold, (usually announced towards the end of the year), does not affect your obligation to continue submitting SDs for the current year. So, if the value of your EU trade in any calendar year falls below the threshold, you must continue to supply SDs to the end of that calendar year.

If you’re not required to provide SDs at the start of the year, you must continue to monitor your trade. If, at the end of a particular month, the cumulative value of your EU trade from 1 January for either arrivals or dispatches exceeds the threshold, you must submit SDs for the rest of the calendar year. This will include the month in which you reach the threshold.

For example, a business whose cumulative total of arrivals during 2015 exceeds £1.5 million in April would need to complete arrival SDs from April to December 2015.

These rules apply equally to businesses whoseEU trade expands to exceed the threshold, to those who start to undertake EU trade for the first time and to those who are newly registered for VAT.

It’s your responsibility to monitor your EU trade to determine when you have to submit Supplementary Declarations. HMRC will also be monitoring the value of your EU trade and will write to you from time to time to check that your records are correct.

In assessing the value of your trade you must not include any Excise Duty payable.

When calculating if you’ve exceeded the Intrastat threshold, remember that the value of goods involved in processing, moving between the UK and EU member states, and the value of goods supplied to or received from private individuals, is included in EU trade totals.

When a VAT registered business is sold to a new owner the obligation to submit an SD might change, (typically where a company changes ownership), unless the person running the business remains the same after the sale as before. This is because the obligation to provide information is oriented around the particular person who concluded a relevant contract for the delivery or dispatch of goods. The SD requirement cuts in where the value of such contracts in a given 12 month period exceeds the threshold for the time being in force. So, where businesses are sold and a new owner takes on the running of the business, they’ll only have an obligation to submit an SD if they’ve exceeded the threshold in their own right.

If you have no EU trade during a particular period the law does not require you to submit a ‘nil’ return. However, HMRC encourage you to submit ‘nil’ returns because this prevents unnecessary queries.

Delivery terms information

If your trade (either arrivals or dispatches) exceeds the delivery terms threshold you must provide additional delivery terms information on your SDs.

The delivery terms threshold for both arrivals and dispatches is currently £24 million.

If you exceed the threshold for arrivals (of goods), but not for dispatches, delivery terms must be provided for arrivals only.

If you exceed the threshold for the dispatch (of goods), but not for arrivals, delivery terms must be provided for dispatches only.

Unlike the exemption threshold, if you reach this second threshold during the calendar year, you do not have to start submitting delivery terms data until 1 January of the next calendar year and only then if your arrivals and, or dispatches remain above the new threshold set for the following year.

If you fail to submit SDs or they’re inaccurate

You could be liable to penalties if your SDs are persistently late, missing, inaccurate, incomplete or where only part of a month’s EU trade is declared. HMRC can provide help on the completion of the Intrastat forms if you’re experiencing difficulties.

The penalty regime is a criminal one and could result in proceedings in a magistrate’s court. This could lead to a maximum fine of £2,500 being imposed for each offence.

However, there could be the opportunity to ‘compound’ any proceedings which involves the offer of an administrative fine in lieu of any Court proceedings.

You must pay any administrative fines electronically by Bacs or CHAPs, using

Bank Account No: 12000903
Sort Code: 08 32 00

Use IP followed by your VAT number as the reference (for example, IP 123 4567 89). If this method poses any difficulty, email: intrastatenquiries@hmrc.gov.uk

Payment of a compound penalty does not absolve you from your legal obligation to submit the SDs for the periods covered by the penalty.

Wherever possible, Intrastat requirements align with VAT requirements. For example, the value to be declared for Intrastat is normally the invoice or contract price (exclusive of VAT), as used for VAT purposes. This allows the integration of Intrastat records with normal business VAT records, thus minimising the overall burden.

However, although Excise Duty is included on the VAT Return values, it’s not included in the value declared on the SD. Intrastat requires that you declare the value of the goods only. Therefore, if the total value of your arrivals or dispatches trade, excluding Excise Duty, is below the Intrastat threshold, you’re not required to submit Intrastat supplementary declarations.

The person who is responsible for declaring a movement of goods

The legal entity responsible for declaring the goods movement in the UK is usually the one who concluded the contract (with the exception of the freight contract) giving rise to the movement of the goods in or out.

In nearly all cases the legal entity responsible is the VAT-registered business that is able to zero-rate the supply to a business in an EU member state (for dispatches) or is liable to account for VAT on the acquisition of the goods (for arrivals). Where fiscal agents are responsible for VAT declarations, they’re also responsible for the SD.

However, in cases when a business which concluded a contract giving rise to the movement of the goods is unable to provide the data required, because of the way the goods are traded, the business which actually transfers the goods across the frontier will be responsible for making the declaration.

In certain circumstances the business who physically receives the goods (rather than the business that concluded the contract) will be in a better position to provide the declarations.

An example of this is a delivery of excise goods such as fuel oils where the excise warehouse keeper might be in a better position to provide the declaration. Even though the business that concluded the contract is legally responsible, it’s acceptable for the warehouse keeper to provide the declaration provided both parties are aware and in agreement of who will provide the declaration.

In these circumstances both parties must inform HMRC of who will be providing the declaration by emailing: intrastatenquiries@hmrc.gov.uk.

If the legal entity which concluded the contract is not required to be registered for VAT in the UK (for example, the goods are within the fiscal warehousing regime), then responsibility rests with the entity which arranged for the physical dispatch of the goods, or takes physical possession of goods which have arrived in the UK (for example, a warehouse keeper).

Goods that are included

You must report goods which have moved between the UK and an EU member state by way of trade.

This includes goods:

• bought and sold
• transferred within the same legal entity
• sent for or returned after processing
• supplied as part of a contract for services
• to be installed or used in construction
• supplied free of charge
• on long term hire, loan or operational lease
• lost or destroyed, if goods dispatched from the UK are lost or destroyed in transit they must be recorded on the supplementary declarations (this does not apply to arrivals)

Goods that are excluded

There are certain circumstances where movements of goods are excluded from Intrastat and must not be included on your Intrastat declaration.

These mainly concern:

• movements not by way of trade (for example personal goods such as travel luggage, items involved in moving house or ballast)
• goods in transit including goods which are in transit through the UK, this applies even when there are stops or temporary storage, provided that these are for transport reasons
• certain purely temporary movements where the goods are to be returned to the UK or to an original EU member state within 2 years and there is to be no change of ownership
• monetary gold
• means of payment which are legal tender and securities, including means which are payments for services such as postage, taxes, user fees
• goods moving between the UK and its territorial enclaves (for example embassies, armed forces bases) in an EU member state or moving within the UK to an enclave of an EU member state
• goods used as carriers of customised information, including software
• software downloaded from the internet
• commercial samples and advertising material provided free of charge
• goods supplied using the Margin Schemes for second hand goods
• goods sent for or returned after repair
• means of transport travelling in the course of their work, including spacecraft launchers at the time of launching
• newspapers and periodicals supplied under direct subscription
• the supply of machine tools that remain in the UK and are used to manufacture goods that are dispatched to the EU

5.5 Reference period

Goods must be included on the SD in either:

• the calendar month during which they arrive in, or are dispatched from the UK
• the calendar month of the VAT tax point
• you can choose which method will best allow you to meet the accuracy and timeliness requirements of the Intrastat system, but you must use the same method each month

5.6 Exchange rates

You must declare the value of goods on your SD in sterling. The exchange rate used for VAT purposes is acceptable and can be the UK selling rate published in national newspapers, banks, the period rate published by HMRC in the exchange rates for 2020: monthly guide or from the VAT helpline.

If you wish to use a rate for VAT purposes which you use for commercial purposes, you must make sure that this is acceptable to HMRC by applying in writing to:

HM Revenue and Customs
VAT Written Enquiries Team
Alexander House
21 Victoria Avenue
Southend-on-Sea
Essex
SS99 1BD

The exchange rate on the date of settling a supplier’s invoice, forward rates, or rates derived from forward rates are not acceptable as they do not represent an actual verifiable exchange rate and are purely speculative.

Further information on acceptable exchange rates is available in VAT Notice 700: the VAT Guide and VAT Notice 725: the single market.

Goods of unknown value

Due to the manner in which certain goods are traded, a value sometimes cannot be established at the time you need to submit your Intrastat declaration. In these cases, you can email: uktradeinfo@hmrc.gov.uk and HMRC might be able to authorise you to use a ‘best estimate’ of value. However, you must not use such a procedure without prior written approval.

Once you know the true value you’ll need to amend the original SD, unless the amount involved is less than the thresholds for providing amendments.

Any delay caused by processing and reconciliation of invoices within your own organisation is not a valid reason for using a ‘best estimate’.

Detailed methods of establishing a value can be found in Chapter 3 (Value of goods for customs purposes) of the Union Customs Code (Council Regulation (EU) No 952/2013 Official Journal Ref No L269), which can be downloaded from Access to European Union law.

Classify your goods

Commodity codes are used to classify goods.

HMRC produces a comprehensive list of commodity codes - referred to as the Combined Nomenclature (CN) - on the UK Trade Info website.

Help on classifying your goods can be found in Notice 600: classifying your Imports and Exports.

If, after studying the CN and seeking help from other sources such as a Trade Association or a Chamber of Commerce, you remain unsure of the classification of goods, you can request additional support by sending a request by email.

Email: classification.enquiries@hmrc.gov.uk

To enable HMRC to deal with your enquiry, ensure that:

• only one item is shown per email
• the request includes the following information:
  • what the product is
  • what it’s made of, if made of more than one material please explain the breakdown
  • what it’s used for
  • how the product works or functions
  • how it’s presented or packaged

Some additional information is required on certain products:

• footwear: include the type (for example shoe, boot or slipper), upper material detail, outer sole material detail, heel height and the purpose for men or women
• food: include precise composition details by percentage weight of all the ingredients to 100% and the method of manufacture or process undergone (for example fresh, frozen, dried, further prepared or preserved)
• chemicals: include the CAS Number, whether the product is a liquid, powder or solid and include the percentage ingredients
• textiles: include the material composition, how it is constructed (knitted or woven) and the name of fabric
• vehicles: include the age, engine type (petrol or diesel), engine size, whether the vehicle is new or used, whether the vehicle is over 30 years old, whether it’s in its original condition, is the vehicle going to be for everyday use

A classification officer will reply by email, giving you non-legally binding classification advice based on the information you’ve supplied.

Ancillary Cost Survey

The value declared on the SD is normally that used for VAT. This value will not be on a consistent basis as the delivery terms of contracts vary greatly, ranging from ex-works to fully delivered. Factors are programmed into the HMRC system to adjust individually declared values to the standard bases of value required by EU legislation for statistical purposes.

In order to produce and update these adjustment factors, HMRC need to seek information on freight, transport and insurance costs.

To help HMRC in this, you could occasionally be asked to provide details of costs incurred for a limited number of transactions, usually for no more than 6 lines of trade.

Response to the Ancillary Cost Survey is voluntary. However, your assistance in this area will enhance the integrity of the UK intra-EU trade statistics.

Once you’ve satisfactorily completed an Ancillary Costs Survey sample form, you’ll not be asked to take part again for at least 12 months.

If you’re legally required to submit SDs you must:

• keep a copy of every SD you make or which is made on your behalf
• keep copies of all papers and documents which have been used for the purpose of compiling SDs
• produce any of the above records to a HMRC visiting officer when required to do so
• permit the officer to make copies or extracts or remove records for a reasonable period

You must keep your records for 6 years. This is in line with VAT requirements, and applies equally to information stored by electronic means.

HMRC’s visiting officers have the right to enter the premises of such businesses, or the premises of anyone compiling SDs on their behalf, at any reasonable time in order to carry out checks.

Computer records

You can keep your records on a computer provided they can be readily converted into a satisfactory legible form and made available to HMRC on request. If you do keep your records on a computer, you must make sure that HMRC can have access to it and can check its operation and the information stored.

HMRC can ask for help from you or anyone else having charge of, or otherwise concerned with the operation of the computer or its software.

If a computer bureau is employed, you’re responsible for arranging for the bureau to make your records available when HMRC wish to see them. Normally this will be at your principal place of business.

However you decide to keep your records, you must be able to make them readily available to HMRC’s officers when they ask to see them.

The Intrastat visit

Periodic visits will be made to assure systems used to complete SDs and check the accuracy of your Intrastat declarations. The visit will be made to your premises, not to your agent. You’ll need to make sure that your agent sends you copies of declarations for your files.

With the agreement of the Intrastat officer, a visit can exceptionally be made to an agent’s premises where this is considered appropriate. These arrangements are entirely at the discretion of the officer and do not relieve the business of any of the responsibilities of the Intrastat system.

During the visit the officer will:

• want to talk with you or the person who is in charge of your intra-EU trade, to get a complete picture of your activities and to have your system of record keeping explained
• want to inspect your records of the SD information sent to HMRC, this will apply whether you’ve supplied the declarations yourself or have employed an agent to send the information on your behalf
• ask you to explain any differences between the total of the values shown on your SD and the EU-trade totals shown on your VAT Return
• need to be satisfied that declarations are complete and accurate
• want to know what steps you take to make sure that your declarations are correct, and that they’re submitted on time
• check the build-up of declarations, and ask you to produce the documentation to support selected items within declarations, such documentation might include orders, delivery notes, goods invoices, freight invoices or payment advices
• select from documents and check that they’ve been correctly included in declarations
• make cross-checks between the 2 sets of records, if your Intrastat and normal purchase or sales records are separate
• want to examine your computer systems and computer data in order to perform checks

If you fail to submit your Intrastat Supplementary Declarations (SDs) by their due date, or send data that is incomplete or inaccurate, you may be committing a criminal offence. The 'due date' is the 21st day of the month following the month they relate to.

The penalties for late or inaccurate SDs may be imposed where SDs are persistently late, missing, inaccurate or incomplete. The penalty regime is a criminal one and could result in proceedings in the Magistrate's Court.

If your business receives a Warning of Possible Criminal Proceedings letter, and as a result you bring your Intrastat declarations completely up to date, you may face an administrative fine rather than legal proceedings. However, if you still fail to make your declarations, you may be taken to court.

You should pay any administrative fines electronically by Bacs Direct Credit, Internet/Telephone banking or CHAPS, using the following bank account details:

When making your payment please ensure you quote your reference number - IP followed by your VAT Registration Number, eg IP123456789.

Complying with the Intrastat system will mean you can avoid penalties and court fines. HM Revenue & Customs offers help if you are having difficulty completing Intrastat SDs.