You're required to keep records for all traded goods you declare to HMRC for four years, for duty and tax purposes and for government statistics.
All businesses must keep and preserve certain records and accounts and be able to present these upon request to HM Revenue and Customs (HMRC). If you’re VAT registered you must keep records and accounts and/or if you’re importing or exporting you must declare any goods you move and keep appropriate records. Although a lot of trade is carried out electronically it’s still important to have an efficient system of record-keeping and to know how long to store documents.
This guide provides information about how long HMRC and other government agencies expect you to keep VAT records and key import and export documents. It provides guidance on data protection and best practice for archiving trade documents. It also explains what penalties apply for regulatory non-compliance and how to appeal against them.
Best practice when archiving your international trade documents
It’s vital that you have a robust system for keeping business records. This will help you comply with international trade regulations and allow HMRC to carry out audits effectively. Your records must be:
- accurate and up to date
- readily accessible whether held on paper, computer, microfiche or microfilm
- available for inspection at all reasonable times
The archiving period for your records will vary according to the individual procedure. However, in the event of a criminal investigation, traders’ records dating back ten years may be used as evidence. Accordingly you may decide to retain documents for that length of time. After the date of entry you can keep your records on a computer.
In the case of procedures, be sure to:
- have a facility to download data for any off-site checks or audit work that HMRC officers might need to carry out
- maintain adequate back up and disaster recovery systems
- include the computer system in your annual audit
- give advance notice to HMRC of any proposed operating system changes
If your record-keeping is causing storage problems or undue expense, get in touch with HMRC’s VAT, Customs and Excise Helpline. They may allow you to reduce the length of time for storing documents.
Management Support System
HMRC can provide assistance in your record-keeping through Management Support System (MSS). This provides import and export data collected on the Customs Handling of Import and Export Freight (CHIEF) system - HMRC’s computerised system for processing import and export declarations. You can find out about the MSS in the guide to UK’s import and export processing system CHIEF.
Under an agreement with HMRC, MSS data can be purchased by subscribers in spreadsheet form, see a copy of the MSS Agreement form.
Four types of reports are produced:
- import item
- import entry
- import tax lines
- export item
You can use data supplied directly from CHIEF records for checks on information provided by your agent. If you’re separately tracking your customs declarations it’ll also fill in any gaps in your records.
Annual reports cost £204 plus VAT, while customised reports for the same period cost £360 plus VAT. If you wish to request a regular monthly report, you will have to sign up for a minimum period of 12 months. It may be possible to request a report for less than a period of 12 months, but this will be treated as a ‘one-off’ request.
You may decide to transfer your archived documents to a third-party provider. A typical storage specialist might offer the following off-site services:
- state-of-the-art security
- document retrieval
- document viewing room
- secure shredding of unwanted archive documents
The cost of storage depends on the provider. If you’re a member of a chamber of commerce or trade association they may be able to help you find local storage services. Otherwise you can call the HMRC VAT, Customs and Excise Helpline.
Data protection and archiving your international trade documents
If you keep archived trade documents on your premises you should make every effort to secure them. Your premises should always be locked when not in use and you could consider additional locking of cabinets and storage rooms.
Assurance officers from HMRC may request that you take steps to meet required security standards. You may have to:
- either have a terminal for official use only or set up a password-entry system for officers to access files on a read-only basis
- keep a record of any changes in software you use
- ensure no unauthorised access to data can take place
If your business has a website or staff intranet you should take precautions against hackers. Hackers can obtain confidential information straight from your network or commit electronic vandalism. The following will help protect your data from attack:
- a firewall
- user authentication
- message encryption
Information about your business held by trade authorities
HMRC collects information about your business for duty and tax purposes and to enforce import and export legislation. It carries out inspections to check the accuracy of returns against declarations made. It may pass information about your records to other government departments, such as the Department for Business, Innovation and Skills.
Under the Data Protection Act you have the right to:
- know if information about you or your business is held on a computer
- be supplied with a copy of that information
- have inaccurate data erased or corrected
- receive compensation if your business is damaged due to inaccurate data or loss or disclosure of personal data
If you import or export animals or food products, the Department for Environment, Food and Rural Affairs (Defra) may collect information about your business for statistical reasons. You can ask them to release this information under either the Environmental Information Regulations or the Freedom of Information Act.
Archiving documents relating to customs procedures
If you’re trading internationally, you must comply with import and export legislation. HMRC frontier officers are responsible for enforcing these laws and you will need the right paperwork before goods can be cleared. Records need to be kept for all procedures including warehousing, Inward Processing Relief, Free Zones and Simplified Procedures and all duties and taxes including VAT and customs and excise duties. HMRC documents, licences and certificates (such as those arising from Common Agriculture Policy, Plant Health and Seeds Inspectors, preference and proof of origin, and Common Veterinary Entry Documents) also need to be kept on file.
If you take advantage of simplified customs procedures you’ll need to retain these documents, so that HMRC can carry out an audit of your business. HMRC carry out audits to check you have paid the correct duty and VAT on your trading activities.
Free Zones and custom warehousing
Goods imported to a Free Zone or to a customs-approved warehouse may delay the payment of customs duty and import VAT. They’re declared to HMRC in the normal way - submitting an electronic declaration to CHIEF based on the format of the Single Administrative Document (SAD) - however, there are specific record-keeping requirements. Your records should include:
- information in SAD for the declaration of entry including the entry number to the arrangements
- commercial or technical descriptions necessary to identify the goods
- the dates on which the goods were entered and discharged from the arrangement
- details of any processing or temporary use of the goods
- location of the goods for monitoring purposes, including details of any transfers
If you find that goods are missing you must notify HMRC of any discrepancy between your stock records and the tally of physical goods.
You must keep your stock records for at least 4 years after the goods have been removed from the Free Zone or customs warehousing arrangements.
Import and export licences
HMRC enforces controls on some imports and exports. You can find out about more about licences in get the right licences for international trading.
Archiving your international trade declarations
You’re required to keep records for all traded goods you declare to HMRC for 4 years.
These are made using the electronic CHIEF system.
For archiving purposes you may choose to print screenshots of documents held on CHIEF and keep paper records. Alternatively, you can access declaration data through HMRC’s Management Support System (MSS). This application archives reference data used to process CHIEF declarations, and provides a variety of query and report options.
For an overview of the CHIEF system see the guide on UK’s import and export processing system CHIEF.
CHIEF is also used when valuing imported goods. Valuations are needed so that HMRC can calculate the amount of customs duty and import VAT payable. Higher value goods also require a valuation declaration form and if you regularly import from the same supplier under the same terms you can use one of these to apply for a General Valuation Statement.
Goods imported under preferential arrangements
You can import goods from some non-EU countries with a reduced or zero rate of import duty. To qualify you’ll need a valid preference document from the vendor showing proof of origin, usually either an EUR1 or ATR form. Documents must be kept for 4 years - unless there is a criminal investigation in which case the 10 year rule applies.
These are carried out using the National Export System (NES). This is an electronic system which allows traders to lodge a declaration either inland or at the frontier. In the case of exports made via another member state of the EU, NES provides an electronic alternative to a paper SAD as evidence of export when making a claim for zero rating of VAT. It also provides official export evidence for direct exports.
You should keep hold of the SAD as proof of export or import for at least 4 years for customs export purposes, unless subject to criminal investigation, in which case the 10 year rule applies. You will also need to retain all commercial invoices and valuation forms.
When keeping electronic records it’s sensible either to make page printouts or take screenshots. However, you may prefer to use the MSS.
Intrastat Supplementary Declarations
If you have trading activity within the EU that exceeds a certain threshold you must complete an Intrastat Supplementary Declaration (SD). You must make a copy of each SD as part of your record-keeping responsibilities and keep them along with any relevant commercial documents for 6 years. Read Supplementary Declarations for Intrastat.
Archiving your international trade relief documents
There are a number of schemes under which you can claim relief on customs duty paid on imports: Temporary admission, Inward Processing, End-Use relief, and Outward Processing Relief. The documentation required to ensure a reduced rate of duty, or no duty at all, changes according to the scheme. However, the record-keeping responsibilities are similar. If you are authorised to use one or more of the customs duty reliefs, you should keep commercial documents from your transactions for at least 4 years in order to show:
- what the goods are
- relevant timescales, eg, when entered to the procedure
- evidence that the goods qualify for duty relief
- details of any processing carried out
- cross-referencing with invoices for your imports and exports
You’re free to keep these records on a computer, but you must advise HMRC if you plan to do so and seek their advice on how to store your electronic records properly. This can be complex in instances where agents and third parties are employed or where a company has more than one premises. They’ll need to ensure your system meets their technical requirements and may ask for your assistance when making any checks.
You should be able to provide the following documentation:
- user guide
- system/program specification
- database management documentation
- file layouts
- data dictionary
- schemas and sub-schemas
Archiving your VAT and Excise documents
VAT is payable on most imports to the UK. If your business exceeds a certain VAT threshold you must be VAT-registered and store records and accounts of all taxable goods or services you receive or supply.
You should keep your VAT records for at least 6 years and maintain a VAT account and certain records. HMRC inspectors may visit your business premises to validate your VAT returns, so you should ensure your system makes it easy for them to check the figures you have used to complete your returns.
You should keep all business records concerning excise goods for at least 6 years, because HMRC will occasionally carry out inspections of your business. Your excise records should cover:
- dispatches and exports
HMRC can also examine trading statements, management accounts and other business records.
Excise traders should also keep an excise duty account. This is a permanent record, in summary format, of all the excise duty payable in each duty accounting period.
Archiving your international trade veterinary and food documents
There are controls on UK imports of live animals intended for human consumption and meat, fish and dairy products - products of animal origin (POAO). You can find out about POAO in the guide to trading in products of animal origin. You must notify the port health authorities if you’re importing POAO or Animal Health if you’re importing live animals so that veterinary checks can take place. As well as the transportation paperwork, you must present the following:
- Common Veterinary Entry Document (CVED)
- health certificate
If your goods are validated, the veterinary (or fish) inspector at the border will keep the original health certificate and give you an authenticated copy, which you should keep at your business premises for at least one year. You’ll also be given a completed CVED, which you should keep for at least one year.
You’ll need a health certificate for most animal and POAO exports. An official veterinarian will sign and stamp the original certificate. You should keep a copy for 2 years.
Some live animals and POAO exports require an Intra Trade Animal Health Certificate if they’re being transported to another member state. You should keep this document for at least 3 years.
In addition, the rules for importing animal by-products - with appropriate documentation requirements - are being phased in between March 2011 and January 2012. For more information, see the guidance for the animal by-product industry
Organic and plant products
To import organic food products, you need authorisation from the Defra. To apply you must pay a fee of £27 and complete an OB 11 application form. Authorisation lasts for one year, after which time it’ll need to be renewed. For details, see Organic produce: how to become an importer.
Individual organic consignments also require a separate certificate - the Certificate of Inspection for Organic Products - from the relevant control body in the third (non-EU) country. You must keep this for at least 2 years after it’s been endorsed.
For some imported plant products a phytosanitary certificate is required. You must keep a copy of this at your business premises for at least 2 years. You can find out about importing, moving and keeping prohibited material including plants information.
Fruit and vegetables
If you’re importing fresh fruit, vegetables, salad crops or nuts you may need to apply for a Certificate of Conformity using Defra’s Procedure for Electronic Application for Certificates (PEACH) system. Whether or not you need a certificate will depend on a number of factors. These include the type of produce, the marketing standards that apply to that produce, and whether it is intended for eating or processing. Where a Certificate of Conformity is required, you should keep this for at least 3 years. Note that PEACH keeps records of your outstanding applications and provides access to inspection data used for risk assessment. You can register to use PEACH.
Archiving your international trade commercial and transport documents
Your record-keeping responsibilities as an international trader include keeping a number of commercial and transport documents on file. These documents are partly for your own benefit, for example, when making claims under warranty. But they also form an important part of your VAT records so you should keep them for at least 6 years.
Sales and purchase records must be kept so that HMRC inspectors can check that VAT-registered businesses have paid the correct VAT on traded goods. These records should include annual accounts, cash books, orders and delivery notes, credit and debit notes, purchase invoices and copy sales invoices and any relevant correspondence.
There are different ways of keeping records to suit your business:
- cash accounting scheme - this operates on the basis of payments received and made, rather than invoices issued and received and is for businesses with a turnover of less than £600,000
- retail scheme - under this scheme you don’t have to issue invoices unless asked, it is aimed at businesses that sell direct to the public
- second-hand scheme - for businesses selling second-hand or antique goods
You should also keep records of transport documents, including:
- shipping orders - containing cargo details and the shipper’s requirements
- bills of lading - documents of title providing evidence of the contract between exporter and carrier
- air/sea waybills - similar to a bill of lading, but not a title document
- consignment note - acknowledgment by road or rail transport carrier of goods being transported
These documents can be useful as further evidence of transactions should they ever be brought into question. Additionally, a combination or all of the following may provide suitable evidence:
- inter-company correspondence
- the customer’s order documentation
- payment details
- sales invoices
- advice notes
Penalty regimes and archiving your international trade documents
Inland assurance officers from HMRC have the right to examine any records that you keep for the purpose of your business. This includes stock and inventory information as well as financial and audit documents. Officers need access to this information to verify claims and declarations you have made.
As well as being accurate and up to date it’s important the information you have is easily accessible to HMRC officers. VAT-registered businesses should have a summary of VAT for each accounting period covered by your VAT returns. Any data held on a computer system should have an audit trail - this means keeping a log of any amendments in the system.
HMRC is aware that one-off mistakes are often genuine errors and not evidence of deliberate wrong-doing. However, if its officers suspect you’re hiding information that should be included in your VAT records they may secretly observe your business for up to a year before or after visiting you.
Although record-keeping is your responsibility you should be aware that if you use an agent or freight forwarder you’re liable for any incorrect information they provide to HMRC.
Fraudulent declarations and dishonest claims for repayment of duty or relief from duty are likely to be met with civil evasion penalties. So too will repeated examples of poor record-keeping. Financial penalties are imposed under the Finance Act 2003. The size of the penalty is influenced by the level of co-operation given to investigating officers. You can [find the statement of practice on civil evasion penalty investigations in Excise Notice 300.
Other civil penalties may be imposed under the Customs Regulations 2003 and Exports Regulations 2003. These range between £1,000 and £2,500 and will only be charged after a warning letter has been issued.
False declarations are also punishable under the Customs and Excise Management Act 1979. This gives HMRC powers to seize goods, which won’t be released until a penalty fee is met and the duty or VAT payable is paid in full.
In exceptional cases HMRC will pursue sanctions through the criminal courts.
If you want to appeal against the issue of a warning letter or civil penalty you must do so within 45 days. Write to HMRC and ask for a departmental review of the decision.
If your appeal is unsuccessful you can take matters further at an independent VAT and Duties Tribunal.
MSS Enquiry Line
Telephone: 01702 366 848
EMRS (Export Marketing Research Scheme) Enquiry Line
Telephone: 024 7669 4484
Telephone: 08459 33 55 77
ICO (Information Commissioner’s Office) Helpline
Telephone: 08456 30 60 60
HMRC Customs Hotline
Telephone: 0800 595 000
UK Trade & Investment Enquiry Line
Telephone: 020 7215 8000
Telephone: 0800 59 5000
NIRU (National Import Reliefs Unit) Helpline
Telephone: 028 6634 4557
APHA (Association of Port Health Authorities) Helpline
Telephone: 08707 444 505
Telephone: 0345 607 3224
Food Standards Agency (FSA) Helpline
Telephone: 020 7276 8829
International Chamber of Commerce UK
Telephone: 020 7838 9363
FTA (Freight Transport Association) Helpline
Telephone: 01892 526 171
HMRC Tariff Classification Email Advice Service
Provision of non-legally binding tariff classification commodity codes advice is available by emailing email@example.com and including the information detailed in Customs Information Paper 27 (2015): Tariff Classification Change of Service Delivery with your enquiry.
Adjudicator’s Office Enquiry Line
Telephone: 0300 057 1111