Changes to EU sales reporting

If you're registered, your VAT return must include figures for EU purchases and sales, but you might also be required to provide EC sales list or Intrastat reports. When do these apply and how are they changing?

EU VAT stats

VAT returns are a necessary evil for registered businesses, but they aren't just for telling the Taxman how much VAT you owe, they also provide important statistics regarding European trade. If you sell or buy goods to or from a country within the EU, you must enter the value of these transactions in Boxes 8 and 9 of the return respectively. If you're about to complete these boxes for the first time, what can you expect to happen next?

EC sales list and Intrastat

If the Taxman spots an entry in either Box 8 or 9, he'll send you an EC sales list form. Unless the value of your EU trade is below certain limits, you must provide details of your EU transactions for goods and services on the form (see The next step). However, where the value of EU goods (not services), including shipping costs purchased or sold, exceeds the following limits:

£600,000 for purchases, the Taxman calls these arrivals; and
£250,000 for sales, also called despatches,
a Supplementary Declaration (SD) is required. This is known as Intrastat.
Fiddly thresholds

Unlike the VAT threshold, which is measured on a rolling annual turnover basis, the Intrastat thresholds are set for a calendar year. So, for example, if for the first time in October 2012 your EU sales or purchases exceed the corresponding limit, you must make an Intrastat declaration for the month of October and for the rest of the year. You'll also be required to make declarations for all of 2013. However, if in 2013 your EU turnover is less than both relevant thresholds, Instrast won't apply for 2014 unless, or until, the month in which either threshold for that year is breached.

Trap. It may be just statistics to you but the Taxman takes them very seriously. Errors or failures to make Intrastat reports can be a criminal offence, resulting in a maximum fine of £2,500 for each one. The good news is that the Taxman only uses this as a last resort where multiple failures are involved. In other cases he'll ask you to pay a fine of £250.

Changes to Intrastat

The Taxman has recently updated his guidance on Intrastat - Notice 60 - which you can download from his website (see The next step). The guide is one of his better efforts in our view and includes details of the following important changes:

from April all Intrastat declarations must be made online. Paper versions won't be accepted
the deadline for submitting the reports will be brought forward. Instead of the end of the month following the period which the report covers, it will be the 21st of the month.

Tip. You don't have to report the data using the Taxman's Intrastat forms. CSV reports, which can be generated by most accounting software, will be accepted by the Taxman (see The next step). This can save considerable time.

EU transactions must be reported on VAT returns, and where the value of such sales and purchases of goods exceeds £250,000 or £600,000 respectively, a monthly declaration is required. Penalties apply for not complying. From April 1 these must be submitted online by the 21st of the following month.

If you would like some more information on this issue or about VAT, don't hesitate to contact us for a free initial meeting on 0191 386 4786

Changes to EU sales reporting

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