HM Revenue & Customs

8 April 2014

Andrew Brown HM Revenue & Customs Trade Statistics 3rd Floor, Alexander House 21 Victoria Avenue Southend-on-sea SS99 1AA

Dear Andrew

Simplification of Intrastat consultation document published on 21 January 2014

1 Overview and executive summary

1.1 The Association of Accounting Technicians (AAT) is supportive of any move to reduce the administrative burden currently imposed on business. Such action benefits not only the business community, but also the wider economy as a whole. We also recognise the importance of accurate and timely statistical information.

1.2 AAT supports the UK’s preferred simplification proposal, as outlined in paragraph 2.17 of the consultation document (condoc). We believe that, if it was adopted, it would achieve a reduction in the administrative burden on business and at the same time ensure the provision of timely and accurate statistical information.

1.3 AAT is concerned that additional data capture requirements, as suggested by the assessment of impacts under options One and Two (para 3, condoc) could potentially discourage smaller businesses throughout the European Union (EU) from making cross-border supplies. As a consequence and in the long term, they could have a detrimental effect on the economies of each of the EU Member States and lead to an overall increase in the business admin burden.

1.4 AAT is pleased to note that the UK has already worked with the EU Commission to deliver a reduction in the coverage of trade on which data must be collected by the Intrastat system for arrivals from 95% to 93%. 1.5 Furthermore we acknowledge that the increased Intrastat Exemption Threshold, from £600,000 to £1,200,000, introduced 1 January 2014 is positive step in the process to reduce the administration burden for those businesses that no longer need to submit Intrastat declarations.

2 AAT’s response to the consultation document questions

2.1 AAT is not required to submit Intrastat declarations and does not use the trade statistics data produced from Intrastat declarations. We therefore do not feel it would be appropriate to respond to the first five of the fourteen questions in the condoc. Our responses to the remaining nine questions are as follows:

Question 6 Of the four options given, which do you prefer and why?

2.2 Of the four alternatives outlined in the condoc (para 2.19) AAT’s preferred choice is for a reduction in the coverage of trade on which data must be collected by the Instrastat system in respect of both arrivals and dispatches to 90%.

2.3 We believe that our preferred option will best reduce the number of businesses required to submit Intrastat declarations, when compared to the alternatives, whilst at the same time providing the UK authorities with accurate and timely statistical data.

Question 7 What simplification option do you prefer?

• the EU Commission’s SIMSTAT proposal (extra data requirement for dispatches with the possibility of all businesses not being required to submit arrivals data);

• the EU Commission’s SIMSTAT proposal but meeting our national minimum data quality needs (extra data requirement for dispatches with the possibility of some businesses not being required to submit arrivals data);

• the alternative proposal to reduce the coverage

2.4 Of the three mooted options (above) AAT’s preference is the “alternative proposal to reduce the coverage” of trade by value for either, or both, arrivals or dispatches.

2.5 AAT would like to see a reduction in the coverage of trade on which data must be collected for both arrivals and dispatches. Question 8 Which of these impacts affected your choice?

• exempting all businesses from the requirement to submit arrivals declarations;

• exempting more businesses from the requirement to submit Intrastat declarations;

• relatively quick implementation;

• loss of commodity code data;

• loss of country data;

• potential impact on quality checking;

• delays in publishing UK data (SIMSTAT);

• other (please specify).

2.6 When drafting our response to questions 6 and 7 the following factors were taken into account:

2.6.1 We were firmly of the opinion that exempting a greater number of businesses from the current requirement to submit Instrastat declarations would be the most effective way to reduce the administration burden faced by business.

2.6.2 We, further, believe that any resulting proposal which can be implemented relatively quickly and easily would be of significant benefit to the EU Commission, Governments and Government Departments throughout the EU community and the wider EU population in general.

2.7 AAT is concerned that the proposed Single Flow system (para 2.1, condoc), if implemented, could result in delays in publishing UK data, through the fact that the UK would be reliant on each of the other EU Member States providing information about their own dispatches to the UK.

2.8 Furthermore, The Single Flow system could result in each Member State becoming concerned over the quality and the timing of the supply of data made available to them by other Member States. Question 9 Would you be opposed to the implementation of either of the suggested options below, at least in the short term?

• reducing the coverage of trade by value for either or both arrivals and dispatches;

• A ‘Single Flow’ system as described above.

Or are you open to either option?

2.9 As previously observed (para 2.7 and para 2.8) AAT is opposed to the implementation of the proposed Single Flow system due to the fact that when it is compared to the UK’s preferred simplification proposal it appears that it would be relatively costly to implement, operate and could result in concerns over the quality and the timing of the supply of data.

2.10 We are in favour of reducing the coverage of trade by value for both arrivals and dispatches (as previously stated in para 2.4).

Question 10 Do you think any other options could be considered?

2.11 AAT does not wish to put forward any other option(s) for consideration.

Question 11 Do you have any general comments related to burden reduction or Intrastat statistics?.

2.12 As previously stated (para 1.1) AAT is in favour of reducing the current onerous administrative burden carried by businesses.

2.13 We strongly believe that any reduction achieved will, not only, benefit the business community but, also, the wider economy as a whole.

2.14 AAT recognises the importance of accurate and timely statistical information (para 2.7, 2.8 & 2.9).

2.15 We believe that the UK’s preferred simplification proposal, as outlined in (para 2.17, condoc) affords the best route to achieving a reduction in the administrative burden faced by business and at the same time ensuring provision and collation of accurate statistical information on a timely basis.

Question 12 Do you have any comments on the indicative impacts and costs identified in the table of impacts for the increased data requirements if the SIMSTAT proposal is introduced?

Option One - SIMSTAT proposal – removal of the requirement to submit arrivals declarations (with additional data requirements at dispatch)

Question 13 Do you have any comments on the indicative impacts and costs identified in the table of impacts for the increased data requirements if this modified SIMSTAT proposal is introduced?

Option Two - SIMSTAT proposal (with additional data requirements at dispatch) – reducing coverage for arrivals to 90% to meet national requirements

Question 14 Do you have any comments on the indicative impacts and savings identified in the table of impacts for the alternative proposal?

Option Three - Alternative simplification proposal: 93% coverage for arrivals and dispatches (used for illustrative and comparative purposes)

2.16 AAT does not wish to comment upon the impact assessments specifically, other than to observe that we share the view that Options One and Two would be relatively costly to implement and operate when they are compared to Option Three.

3 About the AAT

3.1 We have over 50,000 full and fellow members and 76,000 student and affiliate members worldwide. Of the full and fellow members, there are 3,900 Members in Practice (MIPs) who provide accountancy and taxation services on a commercial basis to individuals, not-for-profit organisations and the full range of business types. (Figures correct as at 31 December 2013)

3.2 AAT is a registered charity whose objectives are to advance public education and promote the study of the practice, theory and techniques of accountancy and the prevention of crime and promotion of the sound administration of the law.

3.3 In pursuance of our objectives AAT provides a membership body. We have drafted our response, not only on behalf of our membership but also from a wider public benefit perspective. Further engagement

If you have any questions or would like to consult further on this issue then please contact the AAT at: email: [email protected] and [email protected] telephone: 020 7397 3088

Aleem Islan Association of Accounting Technicians 140 Aldersgate Street London EC1A 4HY

Yours sincerely

Aleem Islan Technical Manager (Accounting) t: +44 (0)20 7397 3088 f: +44 (0)20 7397 3009 e: [email protected]