Introduction and in depth study of Intrastat
When movement of goods takes place between the UK and the EU member states then there is a method of collecting information and producing statistics about the same. This method is called Intrastat. Intrastat came into existence on 1 January 1993 before which custom declarations was the source of trade statistics within the EU. Movement of goods includes movements which are not necessarily sale and purchase. Intrastat and EC sales list should not be confused with each other. EC sales list takes into account both goods and services and Intrastat deals only with goods. If your trade in goods does not exceed a certain limit then you do not have to worry about Intrastat separately and all that you need to do is fill the VAT return properly. When the threshold limit is exceeded then you will have to submit a monthly Intrastat supplementary declaration from and inclusive of the month in which the threshold was exceeded. This declaration is also called an Intrastat return.
Procedure for submitting supplementary declarations
First of all collect sales/purchase ledgers, invoices, and any other documents that relates to the sale and purchase of goods for the month when the return is filed. Then make sure that the invoices have the commodity code, value of goods, net mass, supplementary units and the country. Note that the value of goods does not include VAT and net mass includes the weight of the package.
Procedure to fill the Intrastat supplementary declaration
You need a username and password to register and submit Intrastat returns . This login information is not the same as the one you use to submit your EC sales list and VAT returns. You should make sure to register as a trader when you are submitting the form online. If an agent is making a declaration on your behalf then he should use their own UK VAT registration in the box meant for agents. You should receive the login details within 48 hours
Business which exceed the Intrastat threshold have the legal responsibility to submit timely and accurate supplementary declarations on or before 21st of each month following the month of account. Such business holders have to keep a copy of the supplementary declaration made on their behalf. These business holders must also keep a copy of all documents used in the process of compilation of supplementary declarations. All the records for last 6 years also need to be maintained. In case you fail to submit an Intrastat Supplementary declaration by the due date or you send wrong or incomplete information then it is a criminal offence and you may have to pay a heavy fine. Intrastat is becoming more of a tool to bring forth VAT frauds. This is being done by asking business owners to concile their VAT returns to their Intrastat filings
I would like to conclude by saying that Intrastat is way too important and failure to fulfill the related legal requirements can lead to penalty so you should hire a tax expert to file your Intrastat. Another simple reason to hire a tax representative is because Intrastat is complex to understand.