The system for collecting statistics on the trade in goods between EU member states
VAT-registered businesses that trade in goods with other EU member states are required to provide details of these transactions which are used for statistical purposes. Intrastat is the system used to collect these statistics.
Movements of goods between EU member states are called Arrivals (acquisitions, purchases or imports) and Dispatches (removals, sales or exports).
All VAT-registered businesses must show the total value of goods dispatched to other EU member states in box 8 and the total arrivals of goods acquired from other EU member states in box 9 of their VAT Return.
In addition, those who trade in the EU above the Intrastat exemption threshold in force during the year must also complete a monthly Supplementary Declaration (SD). The thresholds are £1.5 million for Arrivals and £250,000 for Dispatches.
Larger businesses that trade above the Intrastat delivery terms threshold of £24 million must also specify delivery terms information on their Supplementary Declarations (SDs). See the guide on completing Intrastat SD.
The Intrastat system and its users
Intrastat is the system for collecting statistics on the trade in goods between EU member states. The supply of services is excluded from Intrastat.
In addition to goods that have been bought and sold, Intrastat also covers goods that have moved between EU countries for other reasons. For more information on these types of movement see the section in this guide on what information is required in a SD.
Every VAT-registered business trading goods with other EU member states is obliged to declare certain information. The amount of information required from you depends on whether the value of your Arrivals (purchases or imports) or Dispatches (sales or exports) exceeds the annual Intrastat exemption thresholds.
Businesses with Dispatches or Arrivals of goods below this threshold must only declare the value in boxes 8 and 9 on their standard return. This is then returned to HM Revenue and Customs (HMRC) in the normal way.
Businesses that go above the threshold in either Dispatches or Arrivals (or both) must also submit an SD giving more detailed information. See the section in this guide on what information is required in a SD.
Although Intrastat does not apply to the supply of services, the other EU trade reporting mechanism known as the EC sales list does apply to both goods and services. For more information see the guide VAT: how to report your EU sales.
The importance of Intrastat
Information about the trade between EU member states is vital to governments and other users, including businesses themselves.
In the UK, the government uses trade statistics to monitor the health of the economy. The statistics are an important part of the Balance of Payments account, supplied by the Office for National Statistics. Trade figures also affect other decisions that have an impact on our daily life in the UK. For example, they may play a part in persuading the Bank of England to change interest rates. The effects of this are felt in mortgage rates, utility bills, excise duty rates, credit card costs and so on.
A number of UK government departments use the trade statistics provided by businesses to spot trends, set trade policy and find ways to help UK businesses. Outside the UK, Intrastat data is included in the trade information supplied to the European Commission, the European Central Bank and United Nations bodies such as the International Monetary Fund.
Your business can benefit greatly by using trade data to assess market share, look for gaps in the market and develop new markets. You should supply accurate and complete data by the due date. Persistently returning inaccurate or late data may lead to you incurring penalties.
How and when to submit Intrastat returns
If your Arrivals (purchases or imports) or Dispatches (sales or exports) with other EU member states are below the thresholds for the calendar year, all you need to do is fill in boxes 8 and 9 of your return. In box:
- 8, record the value of any goods dispatched to destinations in other EU member states
- 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.
If you exceed the thresholds, in addition to filling in boxes 8 and 9 of your return, you must also submit an SD. See the section in this guide on what information is required in a SD.
SDs can only be submitted online.
When to submit an Intrastat return
You must submit SDs on a monthly basis. A calendar month is the normal reference period and you must use four digits to show the month and year for which you are reporting transactions - (mmyy) - eg, 0412 for April 2012.
You must provide Intrastat returns by the 21st day of the month following the period for which you are reporting transactions. For example, your April return must be submitted by 21 May.
However, if your business is approved to use non-standard VAT periods, the reference period can be either the calendar month during which the goods arrive in - or are dispatched from - the UK, or the calendar month of the VAT tax point.
You can choose the method that will best enable your business to meet Intrastat requirements.
Submit your SD online
In addition to the ease and speed of electronically submitting your SD:
- you can easily amend any errors online
- the system automatically calculates the totals for value and net mass
- you can send as many declarations as are convenient for you within any month as long as they all meet the deadline - ie, by the 21st day of the month following the period for which you are reporting transactions
In addition, an email alert service can provide you with a monthly reminder when your returns are due.
Thresholds for SDs
If your Arrivals (purchases or imports) or Dispatches (sales or exports) of goods within the EU are above an annually revised threshold, you must submit an SD. Currently you must submit SDs if your Arrivals are above £1.5 million and/or your Dispatches are £250,000 or more.
There are separate forms for Arrivals and Dispatches which can only be submitted electronically.
If you exceed the threshold on both Arrivals and Dispatches, you must separately provide information on your inbound and outbound trade and submit both forms.
The data you provide on SD forms for Intrastat purposes is also used for purposes of VAT regulations. See the section in this guide on what information is required in a SD.
The threshold applies to the 12-month period from January to December. The threshold can change from year to year - any changes are normally announced in November and take effect from 1 January the following year.
At the end of the year, your obligation may 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 the new threshold, you must submit SDs throughout the following calendar year.
If you exceed the threshold during a calendar year, you must submit SDs from and including the month in which you exceed the threshold.
SDs must be submitted by the 21st day of the month following the period for which you are reporting transactions. For example, your April return must be submitted by 21 May. Your SD must be submitted electronically.
It is your responsibility to monitor your EU trade to determine when you must submit an SD. HMRC will also be monitoring the value of your EU trade and may write to you from time to time to check that your records and theirs tally.
Read about filing your Intrastat submissions electronically in the guide on Intrastat - technology and technicalities.
Information required in an SD
Different types of movement of goods between EU member states must be declared on your SD.
Goods should be declared if they are:
- bought or sold
- transferred within the same legal entity
- sent for process
- sent as part of a contract for services
- supplied free of charge
- on long-term hire, loan or lease
- to be installed or used in construction
- lost or destroyed - if goods dispatched from the UK are lost or destroyed in transit they should be recorded on the supplementary declarations, this does not apply to arrivals
You don’t have to declare certain other movements of goods. These include goods in transit, goods sent or returned after repair and goods being moved temporarily within the EU.
Read Notice 60 intrastat general guide.
On your form, list the Arrivals or Dispatches that were actually carried out during the relevant period. To reduce paperwork, you are encouraged to combine values and quantities of goods where all other details are identical.
You will have to provide the following information when completing your SD form:
- the period covered
- the commodity code classification of your goods
- the sterling value rounded up to the nearest pound - normally this should be the same value you use for your return
- the quantity of the goods - either net mass (in kilograms) or a supplementary unit as specified in the Intrastat Classification Nomenclature (ICN)
- the type of transaction being declared
- the country that you’re dispatching goods to, or country from which the goods have arrived
If the value of your Dispatches or Arrivals exceeds £24 million, you will also have to specify delivery terms information on your SD. Like the main SD threshold, the Intrastat delivery terms threshold can also be altered annually.
Commercial software is available to automate the process of Intrastat returns. See information on submitting Intrastat returns electronically in the guide on Intrastat - technology and technicalities.
Records to keep and other Intrastat requirements
If your business trades in goods in the EU above the annual Intrastat threshold, you must:
- submit accurate SDs on time
- keep a copy of every SD you make or which is made on your behalf
- keep copies of all papers and documents which you have used to complete your SDs
- present any of the above records to an officer of HMRC when asked to do so
- allow the officer to make copies or extracts of the records or remove them for a reasonable period
In addition, you should note that:
- you are allowed to keep computer records as long as they are in a legible format and made available to HMRC
- if you employ a computer bureau you must make the records available to HMRC, normally at your main place of business
- you must allow HMRC officers access to your premises or the premises of anyone completing SDs to carry out checks
As is the case for VAT, you must keep paper and electronic Intrastat records for 6 years.
Read Notice 60 Intrastat general guide.
Penalties for late or inaccurate SDs
If you fail to submit your Intrastat 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 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, online/telephone banking or CHAPS. Read about paying any fines in the guide pay Intrastat penalties.
Complying with the Intrastat system will mean you can avoid penalties and court fines. HMRC offers help if you are having difficulty completing Intrastat SDs.