Archiving your trade documents

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You're required to keep records for all traded goods you declare to HMRC for four years, for duty and tax purposes and for government statistics.

Introduction

All businesses must keep and preserve certain records and accounts and be able to present these upon request to HM Revenue and Customs ( HMRC). If you’re VAT registered you must keep records and accounts and/or if you’re importing or exporting you must declare any goods you move and keep appropriate records. Although a lot of trade is carried out electronically it’s still important to have an efficient system of record-keeping and to know how long to store documents.

This guide provides information about how long HMRC and other government agencies expect you to keep VAT records and key import and export documents. It provides guidance on data protection and best practice for archiving trade documents. It also explains what penalties apply for regulatory non-compliance and how to appeal against them.

Best practice when archiving your international trade documents

It’s vital that you have a robust system for keeping business records. This will help you comply with international trade regulations and allow HMRC to carry out audits effectively. Your records must be:

• accurate and up to date
• legible
• readily accessible whether held on paper, computer, microfiche or microfilm
• available for inspection at all reasonable times

The archiving period for your records will vary according to the individual procedure. However, in the event of a criminal investigation, traders’ records dating back ten years may be used as evidence. Accordingly you may decide to retain documents for that length of time. After the date of entry you can keep your records on a computer.

In the case of procedures, be sure to:

• have a facility to download data for any off-site checks or audit work that HMRC officers might need to carry out
• maintain adequate back up and disaster recovery systems
• include the computer system in your annual audit
• give advance notice to HMRC of any proposed operating system changes

If your record-keeping is causing storage problems or undue expense, get in touch with HMRC’s VAT, Customs and Excise Helpline. They may allow you to reduce the length of time for storing documents.

Management Support System

HMRC can provide assistance in your record-keeping through Management Support System ( MSS). This provides import and export data collected on the Customs Handling of Import and Export Freight ( CHIEF) system - HMRC’s computerised system for processing import and export declarations.

Four types of reports are produced:

• import item
• import entry
• import tax lines
• export item

You can use data supplied directly from CHIEF records for checks on information provided by your agent. If you’re separately tracking your customs declarations it’ll also fill in any gaps in your records.

Annual reports cost £240 plus VAT, while customised reports for the same period cost £360 plus VAT. If you wish to request a regular monthly report, you will have to sign up for a minimum period of 12 months. It may be possible to request a report for less than a period of 12 months, but this will be treated as a ‘one-off’ request.

Outsourced providers

You may decide to transfer your archived documents to a third-party provider. A typical storage specialist might offer the following off-site services:

• state-of-the-art security
• document retrieval
• cataloguing
• document viewing room
• secure shredding of unwanted archive documents

The cost of storage depends on the provider. If you’re a member of a chamber of commerce or trade association they may be able to help you find local storage services. Otherwise you can call the HMRC VAT, Customs and Excise Helpline.

Data protection and archiving your international trade documents

If you keep archived trade documents on your premises you should make every effort to secure them. Your premises should always be locked when not in use and you could consider additional locking of cabinets and storage rooms.

Assurance officers from HMRC may request that you take steps to meet required security standards. You may have to:

• either have a terminal for official use only or set up a password-entry system for officers to access files on a read-only basis
• keep a record of any changes in software you use
• ensure no unauthorised access to data can take place

Combating hackers

If your business has a website or staff intranet you should take precautions against hackers. Hackers can obtain confidential information straight from your network or commit electronic vandalism. The following will help protect your data from attack:

• a firewall
• user authentication
• message encryption

Information about your business held by trade authorities

HMRC collects information about your business for duty and tax purposes and to enforce import and export legislation. It carries out inspections to check the accuracy of returns against declarations made. It may pass information about your records to other government departments, such as the Department for Business, Innovation and Skills.

Under the Data Protection Act you have the right to:

• know if information about you or your business is held on a computer
• be supplied with a copy of that information
• have inaccurate data erased or corrected
• receive compensation if your business is damaged due to inaccurate data or loss or disclosure of personal data

If you import or export animals or food products, the Department for Environment, Food and Rural Affairs ( Defra) may collect information about your business for statistical reasons. You can ask them to release this information under either the Environmental Information Regulations or the Freedom of Information Act.

Archiving documents relating to customs procedures

If you’re trading internationally, you must comply with import and export legislation. HMRC frontier officers are responsible for enforcing these laws and you will need the right paperwork before goods can be cleared. Records need to be kept for all procedures including warehousing, Inward Processing Relief, Free Zones and Simplified Procedures and all duties and taxes including VAT and customs and excise duties. HMRC documents, licences and certificates (such as those arising from Common Agriculture Policy, Plant Health and Seeds Inspectors, preference and proof of origin, and Common Veterinary Entry Documents) also need to be kept on file.

If you take advantage of simplified customs procedures you’ll need to retain these documents, so that HMRC can carry out an audit of your business. HMRC carry out audits to check you have paid the correct duty and VAT on your trading activities.

Free Zones and custom warehousing

Goods imported to a Free Zone or to a customs-approved warehouse may delay the payment of customs duty and import VAT. They’re declared to HMRC in the normal way -submitting an electronic declaration to CHIEF based on the format of the Single Administrative Document ( SAD)- however, there are specific record-keeping requirements. Your records should include:

• information in SAD for the declaration of entry including the entry number to the arrangements
• commercial or technical descriptions necessary to identify the goods
• the dates on which the goods were entered and discharged from the arrangement
• details of any processing or temporary use of the goods
• location of the goods for monitoring purposes, including details of any transfers

If you find that goods are missing you must notify HMRC of any discrepancy between your stock records and the tally of physical goods.

You must keep your stock records for at least 4 years after the goods have been removed from the Free Zone or customs warehousing arrangements.

Import and export licences

HMRC enforces controls on some imports and exports.

Archiving your international trade declarations

You’re required to keep records for all traded goods you declare to HMRC for 4 years.

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