Quinquennial Review of the ‘Ancillary Cost Survey’ (ACS) Published by: HM Revenue & Customs – Trade Statistics Cust. Services: Website: January 2011

Project Name: HMRC v1.8 | 12/02/2007 | 2 Background – What is the ACS? A voluntary monthly survey…. The ACS asks for responses from approximately 342 Intrastat traders per month. …used to collect specific trade details… Details requested include ‘Value of the good’, ‘Delivery Terms’, ‘Netmass’, ‘Partner Country’ and the ‘Ancillary Cost’ (i.e. the cost incurred in the movement of the goods). …which are used to publish EU trade figures on the same common valuation basis as all other EU Member States. The value of trade under this common basis is called the ‘Statistical Value’ Statistical Value can be defined as “the value of the goods plus the cost of movement to the border of the country that publishes the statistics”. EU legislation requires Member States to provide Eurostat, the Statistical Office for the EU, with international trade data on a Statistical Value basis.

Project Name: HMRC v1.8 | 12/02/2007 | 3 What was the review’s purpose? To ensure the ACS remains ‘cost-effective’ Conducting the ACS survey necessitates both time & financial costs to the Government and to businesses. The review acts as a watchdog over these costs, ensuring that they do not escalate unnecessarily. To identify any improvements that can be made The review establishes those areas of the ACS that providers of data are satisfied with, and those they are not. Pointers for improvement of the ACS can therefore be determined from the review. To act as a gateway for communication between HMRC and our Customers The review provides customers with an opportunity to feedback praise, queries, and criticisms of the ACS directly to HMRC.

Project Name: HMRC v1.8 | 12/02/2007 | 4 How was the review conducted? Questionnaires were sent… Postal questionnaires were sent to 352 businesses of which 145 responded. The sample included businesses who usually participate in the ACS and also those that choose not to. …to collect data and views on: Time / Administrative Burden (from ACS participants) E.g.1 The length of time taken to complete the ACS E.g.2 The job position of the person completing the ACS Reasons for non-participation (from ACS Non-Participants) Views on proposed developments to the ACS (from all respondents) E.g.1 The format of an enhanced ‘user-friendly’ ACS form E.g.2 Potential use of electronic submission for ACS data

Project Name: HMRC v1.8 | 12/02/2007 | 5 Results of the review Costs of the ACS: 2005 Vs 2010: The total cost to businesses to participate in the ACS increased £5,000 over the last 5 years. The total cost to government to run the ACS increased £3,700. These increases can be largely explained by the rise in wage costs between 2005 and Cost of the ACS to businesses and HMRC (2005 Vs 2010)

Project Name: HMRC v1.8 | 12/02/2007 | 6 Views from ACS Participants: Proportion with zero difficulties in completing the ACS form and doing so within the two month timescale: Over 93% Over 93% (In 2005, 50% had zero difficulties completing the form and only 86% could complete the form on time without difficulty) The ACS was mostly completed by: Clerical Staff (36%) or Middle Managers (31%) (In 2005, Clerical Staff most likely to complete the ACS (44%) ) The median time taken to complete the ACS: 30 minutes 30 minutes (Comparable to the result from 2005) Views from ACS Non-Participants: Most common reason for non-participation: “No Trade with Ancillary Costs” (36%) “No Trade with Ancillary Costs” (36%)

Project Name: HMRC v1.8 | 12/02/2007 | 7 Views on proposed ACS developments: Businesses that would prefer / be more likely to complete an Electronic ACS form: 70% Businesses regarding the new ‘help-notes’ on the new ACS form as useful: 97% Businesses regarding the proposed new ACS form as an improvement: 98%

Project Name: HMRC v1.8 | 12/02/2007 | 8 Method Comparison with other EU Member States: EU legislation does not dictate the methodology on how Statistical Value should be derived. As such, Member States have taken differing approaches to providing this information. The UK’s method of using a survey to adjust invoice value to Statistical Value is applied in Denmark, Slovakia and Sweden…. …but not in the majority of EU member states – most collect Statistical Value directly from businesses. If the UK were to adopt this alternative method, it is estimated this would add to the annual ACS administrative burden, due to the complexity of calculating Statistical Value.

Project Name: HMRC v1.8 | 12/02/2007 | 9 Recommendations…. The review recommends that:  The ACS continues, as it remains the most cost-effective solution for adjusting trade statistics, that meets legislative obligations with a minimal burden on businesses.  The new ‘user-friendly’ ACS form is adopted.  The feasibility of producing an ‘online’ survey form to declare ancillary costs is investigated.

Project Name: HMRC v1.8 | 12/02/2007 | 10 Thank you uktradeinfo Customer Services HM Revenue & Customs Alexander House, 3SC 21, Victoria Avenue Southend on Sea SS99 1AA Telephone no