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HMRC have published Brief 13/08, which announces that the data already collected for VAT Intrastat purposes may be used by HMRC for other purposes.

The new rules will not require businesses to provide any additional information. Although it applies to those businesses which supply or acquire EC goods over the (current) annual threshold of £260,000 (net of VAT and Excise duty) and which are therefore required to submit monthly ‘Intrastat declarations’, these businesses need take no action as a result of the change in the law, which comes into effect on 1 April 2008.

Background
‘Intrastat’ is the EU-based system for the collection of statistics on the trade in goods between Member States. Within the UK, intra-EU trade statistics are compiled from two sources:

• from the aggregate net value of EC supplies (sales) and acquisitions (purchases) which all VAT registered businesses are required to declare on their VAT returns, used to estimate the total value of trade; and
• from detailed transaction information provided by those businesses, approximately 32,500 which supply or acquire EC goods over the (current) annual threshold of £260,000 (net of VAT and Excise duty) and which are therefore required to submit monthly ‘Intrastat declarations’.

Data from these sources can support HMRC strategy to counter Missing Trader Intra-Community (MTIC) fraud, a sophisticated and systematic criminal attack on the VAT system, which has reduced VAT revenues by an estimated £2 billion to £3 billion in 2005/06 and £1 billion to £2 billion in 2006/07.

However, under current legislation the full extent to which this data can be used for HMRC VAT enforcement purposes is unclear. The position in law is therefore being regularised, so as to make clear that the data provided for Intrastat purposes is to be provided for VAT purposes as well.

No action is required over and above that already required to submit Intrastat declarations. As of 1 April 2008, the data as provided on Intrastat declarations will be provided for both Intrastat and VAT purposes. Affected businesses are therefore still required to provide the information once only, in the same format and at no additional cost. They will not be required to store a second copy of the declaration in their VAT records. New Intrastat forms which make clear the dual purpose of the data in an amended heading to the form will be available shortly.

Although any breach of the new VAT regulation will in principle become subject to a potential penalty under VAT provisions already in place, the VAT penalty provision does not apply where a person is convicted of an offence in relation to Intrastat. Accordingly, affected taxpayers cannot, once the new VAT regulation is in place, become liable to two penalties, under both VAT and Intrastat regimes for failing to submit the Intrastat declaration (or for completing it inaccurately).

Link

HMRC Brief 13/08