Impact of trade in goods data collection changes on UK trade statistics: summary of adjustments and the structural break from 2021

Since the UK left the European Union (EU) on 31 January 2020, the arrangements for how the UK trades with the EU changed. We have considered it important at the Office for National Statistics (ONS), working with colleagues in HM Revenue and Customs (HMRC) and elsewhere, to keep users updated on the impact of changes to trade data collection on our trade statistics, and what steps we have taken to account for these impacts.

This article summarises the adjustments we have applied to UK trade statistics to account for the impact of HMRC data collection changes following the UK's departure from the EU. This article also presents our final position on the discontinuity affecting goods imports from and exports to the EU from January 2021, resulting from the move from Intrastat to customs declarations.

To account for the impact of changes to trade in goods data collection on our UK trade statistics, we have applied adjustments to our estimates of imports from the EU, as shown in Figure 1.

Revisions to the January to December 2021 data are because of the uplift adjustment to account for the move from Intrastat to customs declarations, while revisions to January to June 2022 data are because of the downward adjustment to account for the impact of Staged Customs Controls.

Adjustments to 2021 EU imports estimates

In January 2022, HM Revenue and Customs (HMRC) implemented a data collection change affecting data on imports from the EU to Great Britain (GB). HMRC investigated the change in data collection methods for GB imports from the EU, concluding that, when comparing the components that form the trade in goods data in 2021 and 2022, there was a discontinuity of around 6% by value between the two compilation methods.

More detail on the findings of the investigation can be found in our Impact of trade in goods data collection changes on UK trade statistics: 2021 to 2022 article.

To account for these discontinuities, we applied adjustments to our estimates of goods imports from the EU for the period January to December 2021. After these adjustments have been applied, the net impact is an overall uplift of 6.6% to goods imports from the EU in 2021.

These adjustments are summarised in our Impact of trade in goods data collection changes on UK trade statistics: adjustments to 2021 EU imports estimates article.

Staged Customs Controls

In 2021, the use of Staged Customs Controls (SCC) allowed customs declarations to be reported up to 175 days after the date of import for imports of non-controlled goods from the EU to Great Britain (GB). The UK government introduced full customs controls in January 2022, while July 2022 marked the first full month of data where delayed customs declarations submitted under SCC could not be included. Temporary arrangements still apply for imports of goods from Ireland to GB.

The use of SCC in the first six months of 2022 led to some double counting in UK trade statistics. To account for this, we applied a downward adjustment of £6.0 billion to our estimates of goods imports from the EU for the period January to June 2022.

These adjustments are summarised in our Impact of trade in goods data collection changes on UK trade statistics: adjustments to 2022 EU imports estimates article.

In January 2021, HM Revenue and Customs (HMRC) implemented a data collection change affecting data on goods exports from Great Britain (GB) to the EU, and in January 2022, a further change for data on goods imports from the EU to GB.

Prior to this change, data on UK exports to the EU were collected through the Intrastat survey. In 2021, HMRC moved their data collection of GB exports to the EU to customs declarations and maintained the existing Intrastat survey for collecting Northern Ireland exports to the EU. EU member states also moved their data collection to customs declarations to capture trade between the EU and GB.

We have applied adjustments to our estimates of goods imports from the EU for 2021 to reflect this data collection change, which brought imports and exports statistics onto a like-for-like basis in 2021.

HMRC investigated the change in data collection methods and concluded that there is a discontinuity of around 5% by value for exports to the EU, and a discontinuity of around 6% for imports from the EU between the two compilation methods. This discontinuity is a combination of data not previously collected under the Intrastat survey, such as:

• Parcel Post

• traders not registered for Value Added Tax (VAT)

• traders using a new or different identifier for their customs declarations

More detail on this discontinuity is available in our Impact of trade in goods data collection changes on UK trade statistics: 2020 to 2022 article.

After exploring available data sources, we have been unable to find any suitable data that could be used to base any adjustment for the elements for the discontinuity caused by the inclusion of Parcel Post or the traders using a new or different identifier for their customs declarations. However, we have been able to investigate EU non-VAT traders by evaluating HMRC annual microdata.

Non-VAT registered traders

In 2022, traders not registered for VAT made up 1.4% of exports to the EU and 0.9% of imports from the EU, with the net trade impact from these traders' contributions to EU trade being £0.1 billion. This is the only complete year for which customs declarations were used for both directions of EU trade. In 2021, the contribution to EU exports was 1.2%.

Comparable data are available for non-EU trade, however the patterns of trade for non-EU trade by traders not registered for VAT for 2022 does not align with the EU patterns. It is not possible to determine whether the non-EU proportions pre-2021 are at all reflective of EU proportions and therefore whether any adjustments derived from this approach would be of sufficient quality.

Considering the uncertainty in the suitability of using these data to develop adjustments to UK trade statistics, the very small size of any potential adjustments in value terms, and taking into account that complete adjustments for the pre-2021 period could not be implemented until October 2025 in line with the National Accounts Revisions Policy, we will not be making any adjustments to UK trade statistics to account for this discontinuity.

As a result, users should be aware that the full time series for goods imports from and exports to the EU contains a structural break from January 2021 resulting from the move from Intrastat to customs declarations, so caution should be taken when interpreting and drawing conclusions from these statistics.

While we have assessed that the discontinuity is around 5% by value for exports to the EU, and around 6% for imports from the EU, we do not advise users apply an uplift adjustment to the pre-2021 data to account for this. This is because the discontinuity figures were determined by comparing trade patterns immediately pre- and post-data collection change and may not be consistent for more historical time periods.

Additionally, following Brexit and the subsequent transition period, as well as the impact of the coronavirus (COVID-19) pandemic, supply chain disruption and global recession, there have been higher levels of volatility in trade statistics in recent years. This means that any adjustments extrapolated from short-term data analysis would not be robust. For example, trends in Parcel Post trade are likely to have changed substantially in recent history, particularly during and after the coronavirus pandemic.

Imports from the EU in 2022

Following the adjustments made in October 2023 to our estimates of goods imports from the EU to account for the impact of Staged Customs Controls (SCC), there continues to be a changed pattern relative to mirror statistics reported by Eurostat of EU exports to the UK throughout 2022 and into 2023. For further details, see our Impact of trade in goods data collection changes on UK trade statistics: update on Staged Customs Controls article.

Historically, Eurostat and ONS trade data have never fully mirrored one another, so although this continued observed difference is not definitive proof of a step change, it does require further investigation to understand if there are any other factors in data collection or trader behaviour that could be influencing this trend.