HL Deb 16 July 1990 vol 521 cc737-8WA
Lord Stoddard of Swindon

asked Her Majesty's Government:

Whether an increased degree of error is likely in recording trade with the EC for small and medium-size businesses and how this compares with the present statistical system;

What is the value of United Kingdom exports to the EC from businesses not registered for VAT; and what proportion this represents of total United Kingdom exports to the EC;

Whether the reliability of United Kingdom figures for intra-EC trade will be impaired by the proposed changes in EC trade statistics, and, if so, what the effect will be.

The Earl of Caithness

The Answer on 22nd June to earlier Questions (HL Debs. cols. 1261–2) explained that under the Commission's proposal only large businesses above a statistical threshold are likely to be required to provide detailed monthly data on their intra-EC trade in goods. Estimates for small and medium businesses below this threshold but registered for VAT would be based on data for their total intra-EC trade reported on their VAT returns.

Because figures for total trade for small and medium businesses which may account for 4 per cent. of the trade involved will be drawn from VAT returns which will be subject to routine checks they should incur minimal error. Where however VAT returns are not made monthly the interpolation of trade between individual months will have to be estimated. The present system already involves some imprecision in the allocation of trade between months and we would expect little further increase in the degree of error.

The reliability of figures for total UK trade with the rest of the EC should remain high after 1992. The links between the VAT system and statistics will ensure that aggregate data are accurate. Data may be submitted more slowly than at present and first estimates may therefore be available later or be subject to larger revisions or both.

No estimates are available of the value of United Kingdom exports to the EC from businesses not registered for VAT and none can be made without incurring disproportionate costs. Under the new proposals, after 1992 businesses which are currently exempt from VAT but which undertake more than 35,000 ECU of intra-EC trade per annum will have to register for VAT. The amount of intra-EC trade undertaken by businesses not registered for VAT seems certain to be insignificant.