What is Intrastat?
Intrastat is a system that collects statistics on the trade in goods between European Union (EU) member states. Please note that supply of services is excluded from intrastat.
Which businesses should submit Intrastat?
All VAT-registered business trading goods with other EU member states are supposed to make certain declarations and submit intrastat.
What determines the amount of information required for intrastat returns?
The value of your arrivals (purchases or imports) or dispatches (sales or exports) determines the amount of information required for intrastat returns. Current thresholds for arrivals are £1.5 million and £250,000 for dispatches.
How should businesses with dispatches or arrivals below the threshold declare the value?
Businesses with dispatches or arrivals of goods below the threshold must only declare the value in boxes 8 and 9 on their standard VAT return. It should then be returned to HM Revenue & Customs (HMRC) in the usual manner.
How should businesses going beyond the threshold submit the returns?
Businesses going beyond the threshold limit in either dispatches or arrivals (or both) must also submit a Supplementary Declaration (SD) to provide more detailed information. It needs to be stressed that while the other EU trade reporting mechanism known as the E|C sales list applies to both good and services, Intrastat does not apply to the supply of services. Where they form part of the invoice or contract price of the goods, the values should exclude any tax or duty but include any freight or insurance charges.
What is the deadline for Intrastat?
The deadline for intrastat is 21st day of the month following the period for which a transaction us being reported.
For example, September returns must be submitted by 21st October.
How should the Supplementary Declarations be submitted?
SDs must be submitted on monthly basis. Usually, a calendar month is used as a normal reference period and four digits must be used to show the month and year for which the transactions are being reported – (mmyy) e.g. 0920 for September 2020. However, in case a 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.
Businesses have the flexibility to choose the method that enables them to meet their intrastat requirements easily.
What is The Threshold For Supplementary Declaration Period?
The threshold for Supplementary Declaration Period applies to the 12-month period from January to December and can change from one year to the next. Normally, any changes are announced in November and take effect from 1st January in the following year.
HOW MAY OBLIGATIONS CHANGE FROM ONE YEAR TO THE NEXT?
Obligations may change at the end of the year. However, this will depend on whether EU trade for the calendar year just ending has exceeded the threshold set for the following year. Similarly, SDs must be submitted throughout the following calendar year if it has exceeded the new threshold.
Also, if the threshold has exceeded during a calendar year, SDs must be submitted from and including the month in which the threshold was exceeded.
What should be covered in a Supplementary Declaration?
Arrivals or Dispatches carried out during the relevant period must be included in a Supplementary Declaration form. Along with this, the following information will also have to be provided in an SD form:
- The quantity of the goods – either net mass (in kilogram) or a supplementary unit as specified in the Intrastat Classification Nomenclature (ICN)
- The time period covered
- Type of transaction being declared
- The commodity code classification of the goods
- The sterling value rounded up to the nearest pound (usually, the same value used for VAT return)
- The country goods are being dispatched to or a country from which the goods have arrived
Delivery terms information on your SD may also have to be specified in case the value of your Dispatches or Arrivals exceeds £24 million. Please note that the Intrastat delivery terms threshold can also be altered annually just like the main SD threshold.
What are some other intrastat requirements?
You must adhere to the following intrastat requirements if your business trades in goods in the European Union above the Intrastat threshold:
- Timely submit correct SDs
- Keep a copy of every SD made by you or on your behalf
- Keep copies of all papers and documents used to complete your SDs
- Present any of the above records to an HMRC officer on-demand
- Allow the officer to make copies or extracts of the records or remove them for a reasonable period
HOW SHOULD INTRASTAT RECORDS BE KEPT?
Please note that you can:
- keep computer records as long as they are legible and made available to the HMRC
- make the records available to the HMRC at your main place of business if you employ a computer bureau
- allow HMRC officers access to your premises or the premises of anyone completing SDs to carry out checks
It may be important to mention that paper and electronic intrastat records must be kept for six years – as is the case for VAT.
ARE THERE ANY PENALTIES FOR LATE OR INACCURATE SUPPLEMENTARY DECLARATIONS?
If someone fails to submit the Intrastat SD or sends in some missing or incorrect data, they may be committing a criminal offence. Additionally, where SDs are frequently late, missing or inaccurate, penalties for late or inaccurate SDs may also be imposed. It is also worth mentioning that the penalty regime is a criminal one and could result in proceedings in the Magistrate’s Court.
Furthermore, businesses may be slapped with an administrative fine rather than facing legal action if a Warning of Possible Criminal Proceedings letter is received by it and it and it chooses to update its intrastat declarations. In case you still fail to make your declarations, you can be taken to the court.
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