National statistics

Overseas trade in goods statistics methodology and quality report: annexes

Updated 31 January 2024

1. Annex A Product and Territorial Classifications

1.1 Commodity Classification

The UK classification for TIGS datasets aligns to the Combined Nomenclature (CN) of European Communities, an integrated classification for both Tariff and Statistical purposes. It comprises a single list of descriptions applying to EU and non-EU trade for both imports and exports. It is based principally on the Harmonised Commodity Description and Coding System (Harmonised System or HS for short), owned by the World Customs Organisation (WCO).

Each description is uniquely identified by an 8-digit commodity code. The first 6 digits are always taken from the Harmonised System (HS), while the full 8 digits indicate the CN code. The further detailed breakdown is to reflect trade of specific interest to the EU, but not identifiable at the 6-digit HS (World) level.

There are approximately 9,500 commodity codes in the CN.

The UK OTS is compiled on the above basis but also re-grouped under the headings of the SITC (Rev.4) of the United Nations for publication purposes. The broad headings within this classification are:

• Section 0 Food & live animals
• Section 1 Beverages & tobacco
• Section 2 Crude materials
• Section 3 Mineral fuels, lubricants & related products
• Section 4 Animal & vegetable oils & fats
• Section 5 Chemicals & related products
• Section 6 Manufactured goods classified chiefly by material
• Section 7 Machinery & transport equipment
• Section 8 Miscellaneous manufactured goods

1.2 Country classification

The TIGS datasets records imports according to the country from which the goods are consigned. This is the country from which the goods were originally dispatched to the UK without any commercial transaction in any intermediate country (either with or without breaking bulk in the course of transport). This is not necessarily the country of origin, manufacture or the last country from which the goods were shipped to the UK.

Details of exports are according to the country of destination as declared at the time of export. However, where goods can be traded while in transit (e.g. grain and crude oil), this may not necessarily be the final destination of the goods.

1.3 Territorial coverage

For the purposes of the OTS, ‘United Kingdom’ is defined as Great Britain, Northern Ireland, the Isle of Man, the Channel Islands and the Continental Shelf (UK governed area of the North Sea). Therefore, the TIGS datasets excludes goods movements between these different internal parts of the UK, but includes their trade with other countries.

2. Annex B Specific cases

There are various ‘Specific Movements’ and other specific cases which, by the very nature of the goods or the types of trade involved, are not covered by customs declarations and so not captured via customs declarations the usual way, or are not captured via Intrastat. As a result, different procedures are adopted by HMRC in order to include such trade in the statistics.

2.1 Specific Movements

Industrial plants

‘Complete industrial plant’ means a combination of machines, apparatus, appliances, equipment, instruments and materials which fall under various headings of the HS nomenclature, and which are designed to function together as a large-scale unit to produce goods or provide services. All other goods which are used in constructing a complete industrial plant may be treated as component parts thereof.

For Intrastat records, EU legislation allows simplified procedures for the arrival, dispatch and export of industrial plant component parts. Member States may compile statistics by component parts on condition that the overall statistical value of the industrial plant exceeds €3 million (approximately £2.5 million) unless it is a complete industrial plant for re-use. Such component parts may be classified as:

• Digits 1 – 4 shall be 9880;
• Digits 5, 6 correspond to the CN chapter to which the goods of the component part belong;
• Digits 7, 8 shall be 00.

Vessels and aircraft

The trading of vessels is a particularly difficult area of statistics to capture due to the complex nature of ownership and timing of changes. This is evidenced in the statistical legislation where the definitions for imports/arrivals and exports/dispatches have been amended a number of times.

A revised criterion for defining movements of vessels and aircraft was introduced by new legislation in 2010 to focus on the ‘economic ownership’. This term is defined as ‘the right of a natural or legal person to claim the benefits associated with the use of a vessel or aircraft in the course of an economic activity by virtue of accepting the associated risks’. From this date, imports/arrivals and exports/dispatches are recorded in the statistics where a transfer of ‘economic ownership’ takes place.

The aircraft industry is regulated meaning each EU Country has its own statutory authority to register all aircraft operators. In addition, each aircraft has its own unique reference number and is registered to an owner/operator. Consequently, changes in ownership are more straightforward to track and capture in the statistics.

Goods delivered to vessels and aircraft

Mandatory commodity codes are used for the supply of goods (dispatches and exports only) to vessels and aircraft visiting a UK port or airport that belong to an economic owner established in another country. These codes are designed to be used for goods for the consumption by passengers or crew and operational equipment. The varied trade is combined into three general pseudo CN codes as follows:

• Goods from Chapters 1 to 24 declared in code 9930 2400;
• Goods from Chapter 27 declared in code 9930 2700;
• Goods from other Chapters declared in code 9930 9900

Staggered consignments

The Specific Movement covering staggered consignments permits EU countries to report disassembled / unassembled goods transported in several stages only once.

For Intrastat purposes, the UK has adopted this optional procedure to allow businesses to report the goods in this way.

Military goods

Commodity codes are in place for classifying military goods, such as tanks, other armoured vehicles, artillery weapons and rocket launchers. These are collected through the Intrastat and Customs systems. However, due to the sensitive nature of these headings, the publication of the relevant statistics is subject to suppression at the request of the Ministry of Defence (MoD). These are termed ‘strategic suppressions’ since they have been put in place in order to protect the national interest.

The suppressions are applied to each of these commodity codes at one of two different levels, either complete suppression (where no statistics are published) or suppression of data for specific countries and total quantity.

A full statement on HMRC’s policy on suppressions is available on www.uktradeinfo.com.

Goods delivered to and from offshore installations

Offshore installations are defined as equipment and devices installed in the high sea (outside the statistical territory of any given country) in order to search for and exploit mineral resources. Non-UK installations are deemed as installations established in an area where another country has exclusive rights to exploit that seabed or subsoil.

Movements to these installations are reported under mandatory CN commodity codes (arrivals, dispatches and exports only) dependant on the type of goods as follows:

• Goods from Chapters 1 to 24 declared in code 9931 2400;
• Goods from Chapter 27 declared in code 9931 2700;
• Goods from other Chapters declared in code 9931 9900.

Goods sent between the UK and UK offshore installations on the UK continental shelf are treated as domestic movements and not reported.

Spacecraft

Transactions linked to the production, processing or movement of satellites are reported, as well as any transfers of ownership of satellites, particularly sales of satellites in orbit. Most goods under this description are high value and undergo full scrutiny by HMRC. Launch propulsion systems (launchers) are excluded from the statistics.

Sea products

Declarations received for sea products are assigned to the country where the economic owner of the vessel carrying out the catch is established, regardless of where the products are caught. Catches made by UK economically owned vessels are reported as an export if they are landed in another country. Vessels with economic owners established in another country that land their catch for the first time in the UK report an arrival if the economic owner is registered for VAT in the UK. If not, the buyer of the catch is responsible for declaring the arrival. A UK economically owned vessel landing a catch in a UK port does not make a declaration as this is treated as a domestic transaction.

Electricity and Natural Gas (in gaseous state)

HMRC collects information relating to the trade in Electricity and Natural Gas directly from grid and pipeline operators, provided to HMRC by the Department for Energy Security and Net Zero (DESNZ). As the majority of grid and pipeline operators do not own the product transported, they do not generally have access to values of the product and are only able to provide volumes. HMRC calculates values where they have not already been provided on a declaration.

Electricity (CN Code 2716 0000)

To estimate the value of electricity for all UK trade, the average spot price per month is used. The average price is obtained by using pricing data from the Elexon website.

Natural Gas (in gaseous state, CN Code 27112100)

To estimate the value of Natural Gas for all UK arrivals and dispatches, and Natural Gas imports, the System Marginal Price (SMP) of gas is used. All suppliers and shippers trade gas in the wholesale market. During one trading day the gas price fluctuates depending on demand and supply. The SMP is the highest system bid and system sell price on the day. These prices are published on the National Grid website on a daily basis. These prices are averaged for the month and then used in conjunction with the pipeline operators’ volume data to estimate the value of gas.

Motor vehicle and aircraft parts (Intrastat only)

Simplified procedures exist within the Intrastat regime for classifying mixed consignments of motor vehicle and aircraft parts.

The following specific conditions apply to the use of the classification concession for motor vehicle parts:

• The commodity code to be used is 9990 8700;
• Single items of £600 or more in value are ineligible for this concession and must be correctly classified;
• Engines, axles and gearboxes are ineligible for this concession and must be property classified irrespective of their value;
• A consignment of easily identifiable parts must be classified using the correct commodity code(s).
• The following specific conditions apply to the use of the classification concession for aircraft parts:
• The commodity code to be used is 9990 8800;
• Single items of £600 or more in value are ineligible for this concession and must be classified correctly;
• A consignment of easily identifiable parts must be classified using the correct commodity code(s).

3. Annex C Other specific cases

3.1 Petroleum and petroleum products

Information on trade in oil is collected mostly through Intrastat or customs declarations. However, it is also collected in the following ways:

• Directly from the Oil Terminals at Leith, Kirkwell, Southampton and Lerwick;
• From the Department for Energy Security and Net Zero (DESNZ), who collate data collected by the North Sea Transition Authority (NSTA) through the Petroleum Production Reporting System (PPRS).

Data is collected from the oil terminals mentioned above to ensure that all declarations have indeed been received. Specifically, the oil terminal data is cross checked with the data received via Intrastat and CHIEF/CDS. Any data received from the oil fields that is missing from the data collection is inserted into the trade using a pseudo VAT number. This only relates to dispatches and export trade.

PPRS is used to report flows, stocks and uses of hydrocarbons from field level through to final disposal from a field or terminal, both to UK refineries or for export. Oil shipments direct from the UK Continental Shelf (oil rigs) are known as direct exports. Although some rigs may be outside UK territorial waters (i.e. outside 12 mile radius) they nevertheless come under the UK statistical collection boundary. The only source for statistical data on these direct exports is the PPRS data collated by DESNZ: returns are provided by the operators of the individual reporting units.

Whilst oil obtained from the Norwegian sector of the North Sea Continental Shelf would normally be piped direct to Norway, due to the terrain and distance from certain fields to Norway, the oil is actually piped to the UK first in some cases. Examples where this occurs include all quantities of oil piped to Seal Sands terminal from the Norwegian Ekofisk field. However, only those shipments regarded as genuine importation of Norwegian oil into the UK are included in the UK statistics. All other flows are regarded as being in transit, and therefore excluded.

3.2 Parcel post

Imports from and exports to by parcel post are included in SITC group 911 (‘Postal packages not classified elsewhere according to kind’). The figures relate to goods sent through the Royal Mail Group as ‘Parcel Post’, packets sent by ‘Letter post’ or by ‘Printed Paper Rate’ are not included. The value of parcel post trade is estimated by applying average values to the number of parcels. These average values are derived from sample surveys carried out by the ONS and extrapolated by appropriate price indices. They are classified to the single CN commodity code 99209900. Consignments of value exceeding £2,000 are declared using standard Customs procedures and are therefore included in the relevant commodity classifications.

There is no similar reporting concession for parcel post trade for Northern Ireland trade with EU Member States within Intrastat. Trade will be captured in the normal way (the CN Code 99209900 is not used) where the sender or receiver is a VAT registered business and required to submit an Intrastat declaration.

3.3 Low value consignments

For trade in goods declared via customs declarations, imports and exports of an individual value of £873 or less (for 2022, other than parcel post) are aggregated under SITC group 931 (‘Special transactions and commodities not classified according to kind’), and classified to the single CN commodity code 995000000. This trade is not analysed either by commodity or country. For NI trade in goods with EU Member States, there is only a limited concession that transactions valued at £175 or less (for 2022) may be classified under SITC 931.

3.4 Gold

Trade in gold (i.e. monetary gold, non-monetary gold and scrap, in unwrought or semi-manufactured forms) is reported to HMRC. While data on monetary gold is collected it is not included in the published OTS. From January 2005 onwards, in order to meet EU legislation, non-monetary gold is included in the published OTS.

3.5 Exclusions

The following classes of goods are excluded from TIGS for all trade:

• Means of payment which are legal tender and securities, including means which are payments for services such as postage, taxes and user fees;
• Monetary gold;
• Goods moving between territorial enclaves of countries or international organisations. Territorial enclaves include embassies and national armed forces stationed outside the territory of the mother country.
• Goods used as carriers of customised information, including software;
• Software downloaded from the Internet;
• Goods supplied free of charge which are themselves not the subject of a commercial transaction, provided that the movement is with the sole intention of preparing or supporting an intended subsequent trade transaction by demonstrating the characteristics of goods or services such as:
  • Advertising material;
  • Commercial samples.
• Goods for and after repair and replacement parts that are incorporated in the framework of the repair and replaced defective parts;
• Means of transport travelling in the course of their work, including spacecraft launchers at the time of launching;
• Goods for and following temporary use, (e.g. hire, loan, operational leasing), provided all the following conditions are met:
  • No processing is planned or made;
  • The expected duration of the temporary use is not longer than 24 months;
  • The arrival/dispatch has not to be declared as an acquisition/delivery for VAT purposes (EU trade only);
  • No change of ownership took place or is intended to take place (customs declarations trade only).
• Goods declared orally to Customs authorities which are either of a commercial nature provided that their value does not exceed the statistical threshold of EUR 1000 or 1000 kilograms or of a non-commercial nature (customs declarations trade only );
• Goods released for free circulation after being subject to the Customs procedures of inward processing or processing under Customs control (customs declarations trade only);
• Trade by businesses not registered for VAT or trade by private persons (Intrastat only).

4. Annex D Trade data by preference

4.1 Preference

Goods can be imported into the UK under different trade regimes depending on the product and the country of origin. The main trade regime is the Most Favoured Nation (MFN) which applies, in principle, to all countries. There are other regimes, that provide for a specific country of origin (or group of countries) and for all or part of their products with a preferential tariff rate. One example of a preferential tariff for a group of countries is the Developing Countries Trading Scheme (DCTS).

4.2 Compilation of trade data by preference

The compilation method described below closely mirrors that used by Eurostat in the data it compiles and publishes on trade data by preference. The data by usage of preference combines information from both the Overseas Trade in Goods Statistics (OTS) and the UK Tariff. The OTS data used in this analysis is based on customs declarations so will not include imports from the EU into Northern Ireland which are still collected using the Intrastat survey. The current arrangements for moving goods from the island of Ireland to Great Britain enable Irish traders to continue relying on staged customs controls for the foreseeable future. While these measures are in place, import statistics for trade between GB and Ireland are reported as declared and may not reflect the period in which the goods have been traded.

The UK Tariff database containing the tariff schedule is useful to identify the tariff for a specific product from a specific country at a specific date, but it is not meant for analytical purposes. To remedy this problem the compilation process includes the creation of an intermediate dataset based on the UK Tariff database.

This intermediate file includes variables for each partner country / commodity code combination to identify if:

• The MFN rate is zero or non-zero rate
• An MFN quota exists and if it is zero or non-zero rated
• A DCTS rate exists and if it is zero or non-zero rated
• A DCTS quota rate exists and if it is zero or non-zero rated
• A non-DCTS Preference exists and if it is zero or non-zero rated
• A non-DCTS Preference quota exists and if it is zero or non-zero rated

For this analysis a quota is deemed to exist if a quota measure is available for a product / country (group) combination and that quota has a non-zero usage balance, based on quota balance data available in HMRC.

This intermediate data file is then matched to the Special Trade based OTS on a combination of product code and partner country.

4.3 Simplifying assumptions

The UK Tariff is complex and frequently updated. To create the intermediate file based on the UK tariff the following simplifying assumptions are made:

• Trade flows at the most detailed level are available month by month. To be able to produce a manageable analytical output we take the tariff every first day of each month and consider that it remained unchanged during that month. This is consistent with Eurostat’s approach.
• The UK tariff includes both preferential and non-preferential measures associated with a quota. Goods imported within the quota limit will benefit from a lower duty rate. Once the quota is exhausted, the normal, higher rate will be applied. It will be assumed that any quota still available on the first day of the month will be available for the rest of that month. Where multiple quotas with same rate are available we assume the quota is available while at least one quota is still open.
• For some products, specific measures will be in place that mean there are multiple rates quoted (e.g. MFN rates, multiple quotas – both preferential and non-preferential), with usually one lower rate and one higher rate (often a ‘usual’ rate where specific conditions have not been met for the lower rate). In this circumstance for this analysis we have used the higher rate.
• In line with the Eurostat methodology, if a commodity has an MFN zero import duty, the use variable category is considered as MFN zero, whatever is indicated in the preference data collected from the customs declaration. Similarly if a commodity has an MFN zero import duty, then the eligibility variable is considered as MFN only, whatever preferential measures are shown in the UK Tariff.
• The current analysis compares the import regime for the good as recorded on the customs declaration against duty rates in the UK Tariff. This includes any goods, termed ‘At risk’, that enter Northern Ireland then move to the European Union and are subsequently charged the applicable EU duty rate.

4.4 Data caveats and limitations

The Overseas Trade Statistics is primarily based on administrative data collected from customs declarations. The UK Global Tariff is an administrative data source itself that facilitates the administrative tasks required of traders wishing to import and export goods outside of the UK.

Both data sets undergo quality assurance checks before they are published for public consumption. Nevertheless, like any large data sets there is always the possibility of isolated inconsistencies, e.g., incorrect classification of goods, incorrect statistical value. Where inconsistencies are identified by users of the data feedback mechanisms exist to inform the data provider to allow the inconsistency to be examined and if necessary corrected.

Additionally, the simplifying assumptions made above can lead to limitations in this analysis when comparing the two input data sets, specifically:

• Given simplifying assumptions it may not be able to match a trade movement with the associated measure in the tariff due to timing of changes in the two data sets and hence will not be included in this analysis

• Given the simplifying assumptions a quota measure may no longer be available at the time of the trade movement which may lead to the movement being marked as having an ‘Unknown’ trade regime used

• Data will include trade that has entered NI and then moved on to the EU and been charged duty at the EU duty rate

4.5 Suppression in Trade by Preference Data

Data is suppressed at CN8 level using passive confidentiality as per the Overseas Trade in Goods Statistics. No other level of aggregation of Commodity Code than the 8-digit Combined Nomenclature is presented in the trade by preference data. So, unlike the OTS this product does not include the withheld data at higher levels of aggregation of the Harmonised System.

This means there will be instances where country total, HS2 totals, HS4 totals, and HS6 totals in this analysis will not be the same as in the main bulk data download files and other OTS based products.

5. Annex E Collection and methodology changes following the UK leaving the EU

5.1 Data collection changes

From 31 December 2020, the free movement of people and goods and services between the UK and the European Union (EU) ended. This meant the way HMRC collected trade in goods statistics changed.

Before EU Exit, information on the movements of goods between the UK and EU Member states was collected from Intrastat survey returns.

Since 1 January 2021 (for exports) and 1 January 2022 for (imports), Intrastat only applies to movements of goods between Northern Ireland and the EU.  Movements between Great Britain and the EU are compiled directly from customs declarations (supplementary declarations).

5.2 Staged Customs Controls (SCC)

Staged Customs Controls (SCC), also known as Transitional Entry In Declarants Record (EIDR), were introduced in 2021 to ease the friction of importing non-controlled goods after the end of the EU transition period, by allowing customs declarations to be delayed up to 175 days from the point of import. This easement was made available to traders between 1 January 2021 and 31 December 2021.

To ensure trade data continued being collected for 2021, HM Revenue and Customs (HMRC) maintained the Intrastat survey whilst Staged Customs Controls (SCC) were in place.

5.3 Trade with Ireland

In December 2021, the Government extended the current arrangements for moving goods from the island of Ireland to Great Britain.

These temporary arrangements enable Irish traders to continue relying on staged customs controls. While these measures are in place, import statistics for trade between GB and Ireland are reported as declared and may not reflect the period in which the goods have been traded.

5.4 UK exports to the EU in 2022

From 1 January 2022, the Goods Vehicle Movement Service (GVMS) was introduced for all exports to the EU, allowing the pre-lodgement of declarations to make vehicle flow at the ports as burden-free as possible. When the goods actually leave the UK, notification of departure is legally required within 15 days of the goods export. If no further notification is sent within 15 days of lodging the declaration, the Customs Handling of Import and Export Freight (CHIEF) system will automatically assume the goods have departed.

In January 2021 the timing of the automatic departure on CHIEF was reduced to 5 days for some locations, to reflect the new export procedures at that time. However, following the introduction of GVMS, to support trade at the border and bring harmonisation across all ports, the assumed departure date was increased back to 15 days with effect from 21 January 2022.

Under the TIGS methodology, all exports are recorded from the departure date. Although many declarations are not affected by this change as the departure date is known, a proportion of declarations that waits for the assumed departure date.