Official Statistics

Regional trade in goods statistics disaggregated by smaller geographical areas: explanatory notes 2021

Published 16 November 2022

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This publication is available at https://www.gov.uk/government/statistics/regional-trade-in-goods-statistics-disaggregated-by-smaller-geographical-areas-2021/regional-trade-in-goods-statistics-disaggregated-by-smaller-geographical-areas-explanatory-notes-2021

Summary

HMRC releases annual experimental statistics that subdivide the existing Regional Trade in Goods Statistics (RTS) into smaller UK geographic areas. This release reports on trade in goods at International Territorial Levels (ITL) 1, 2 and 3 for 2021.

Tables produced

The tables produced in this release are:

  1. Summary of existing ITL1 RTS data
  2. ITL2 by EU / Non-EU and import / export
  3. ITL2 by EU / Non-EU, import / export and SITC Section (1-digit)
  4. ITL2 by EU/Non-EU, import / export and Partner Country
  5. ITL3 by EU / Non-EU and import / export

EU Data Source changes in 2021

In 2021 there were changes made to the ways in which UK trade in goods data with EU countries was collected. Details on these changes are outlined in the Explanatory notes below, and RTS methodology document. Please note these changes result in a break in time series EU data, so figures in this release should not be compared with previous years’ releases.

Definitions

Geography

Following the UK’s withdrawal from the EU, a new UK-managed international statistical geography - ITL (International Territorial Levels) - was introduced from 1st January 2021, replacing the former NUTS classification. They align with international standards, enabling comparability both over time and internationally. To ensure continued alignment, the ITL’s were established to mirror the NUTS system. Details of the ITL’s and how they will be managed will be published on the ONS website.

Partner country

This is the country the UK region exports the goods to or imports the goods from. Only the 99 pre-selected partner countries published in the RTS are included in this release. Data is available for a country if the country’s total trade (imports and exports combined) exceeds one per cent of the total trade of that country’s World Region (based on a historical baseline). This does not apply to EU countries where data for all member states is available.

In addition, if a specific partner country cannot be found under a certain breakdown it may be due to the following:

  • The trade for that combination of variables is between 0 (i.e. no trade) and £499,999;
  • The trade has been suppressed under our statistical disclosure policy.

Standard International Trade Classification (SITC) Section

This is a broad classification system which classifies goods into ten categories. It forms part of the hierarchical SITC managed and maintained by the EU.

Allocation of Trade to Geographical Areas

RTS data is compiled by merging trade data collected by HMRC with employment data from the Inter-Departmental Business Register (IDBR). A business’ trade is allocated to a region based on the proportion of its employees employed in that region.

We have replicated the employee allocation method for these statistics, so these figures will aggregate to the published RTS ITL1 figures. However, certain allocations used in the RTS e.g. Below Threshold Trade Allocations and Fixed Link Energy allocations are not disaggregated any further than ITL1.

Explanatory Notes

Introduction

  1. HM Revenue & Customs (HMRC) is responsible for collecting the UK’s international trade in goods data, which are published as two National Statistics series - the ‘Overseas Trade in Goods Statistics (OTS)’ and the ‘Regional Trade in Goods Statistics (RTS)’. This data release is an Experimental Statistic that breaks down the ITL1 RTS into smaller UK geographical areas.

Data source changes

UK to EU exports

  1. Up to 31 December 2020, UK to EU export statistics were collected via the Intrastat statistical survey, which required traders to declare the value and volume of commodities exported to EU Member States within the relevant month of physical goods movement.

  2. For goods moving from 1 January 2021, GB to EU export statistics are compiled directly from customs export declarations made according to the requirements of the Taxation (Cross Border Trade) Act. The customs declaration requirements are more complex than the single monthly aggregated Intrastat return, and can result in differences between dates of declaration and actual movement of the goods out of the country.

  3. The OTS compilation methodology relies upon the acceptance date of the customs export declaration for its inclusion within the relevant month of account, rather than the declared physical movement date used from the Intrastat survey.

  4. Intrastat survey returns continue to be collected for goods exported from Northern Ireland to the EU, under the terms of the Northern Ireland Protocol.

  5. Both the GB to EU customs export declaration data and Northern Ireland Intrastat export (dispatch) data are incorporated into the overall UK to EU export dataset.

  6. As a result of the changes and differences outlined above, there is a break in the timeseries for published UK to EU export statistics from January 2021. Users are advised to note this change when making comparisons to previous quarters/years.

UK imports from EU

  1. For UK imports from the EU, the Intrastat survey continued to operate in 2021 for all UK (GB and NI) imports (arrivals) from the EU, to mitigate the effects of staged customs controls, and to comply with the Northern Ireland Protocol. However, there were changes to other data sources used for RTS, notably the VAT data which now only captures NI trade with the EU, but previously this captured all UK trade with the EU. While this change did not significantly impact our methods for calculating total trade value (£), a new method for business counts had to be devised which is outlined below.

  2. More information on recent changes to trade in goods statistics.

Statistical value threshold in Customs declarations

  1. Customs declarations with commodity line values that fall under the statistical value threshold of £873 (in value) and 1,000kg (in net mass) are aggregated into ‘low value aggregates’. We do not receive business, product, or partner country information on these movements. As a result, we cannot assign this trade to a UK region, therefore the value is assigned to the Unallocated-unknown region.

    This applies to goods exports from GB to EU countries from 2021. This is consistent with the RTS methods used for trade with non-EU countries, which are also sourced from customs declarations. As a result of this change, a value increase will be apparent for Unallocated-Unknown for EU flows from the dates specified above.

Changes in EU Business counts

  1. Due to the recent changes to data sources outlined above, as well as changes to the VAT data source, a new method for EU business counts was introduced in the RTS 2022 Q1 publication which we have replicated here in the RTS smaller geography 2021 release. This results in a break in series from previous RTS EU business counts. EU and total business counts from the 2021 data period onwards are therefore not be comparable with RTS business counts published prior to 2021.
  • Prior to 2021, EU business counts were compiled from Intrastat declarations, while businesses trading below the Intrastat threshold were captured through VAT data. Businesses trading below the Intrastat threshold made up a small percentage of the total trade value but accounted for most of the businesses trading.
  • From January 2021, changes were made to the VAT data which means that only movements between Northern Ireland and EU countries are accurately recorded. Further, following EU Exit, trade between GB and EU countries is now reported through customs declarations rather than Intrastat. Customs declarations therefore became the main data source for GB exports to EU countries from January 2021, and GB imports from EU countries from January 2022.

  • As a result of the changes outlines above, a new time series for EU business counts begins from the data period of 2021. EU business counts are now compiled in the following way:

    • EU exporters
      • From 2021 onwards:
        • GB exports to EU countries via customs export declarations.
        • NI exports to EU countries via Intrastat (above threshold) and VAT data (below threshold).
    • EU importers
      • For 2021:
        • UK imports from EU countries were collected via Intrastat.
        • NI imports from EU countries for those below the Intrastat threshold collected via VAT data.
        • Additional raw customs import declaration data to better capture the GB imports from EU countries. Throughout 2021, businesses could defer their EU imports declarations for up to 175 days, this may impact data quality.

Overseas Trade Statistics

  1. Data is taken primarily from Customs systems (for UK imports from and exports to non-EU trade and GB imports from and exports to EU countries) and the Intrastat survey (for Northern Ireland imports from and exports to EU countries). HMRC does not receive information in respect of goods that move wholly within the UK, nor in intangibles and services such as banking or tourism.

  2. OTS is published on a Special Trade basis, following changes to the methodology from May 2016 account onwards. The RTS is also published on this basis.

  3. Trade in non-monetary gold (NMG) is included in OTS data, however this is excluded from RTS data, including this release. This is because the majority of NMG trade would be assigned to the London region and this would distort the RTS figures.

Balance of Payments

  1. The Balance of Payments (BoP) figures published by the Office for National Statistics (ONS) are calculated on a different basis to the OTS. Therefore, adjustments are made when producing BoP which means that the RTS and BoP are not comparable. The ONS website provides an overview of BoP, and is where you can find their detailed monthly UK Trade Releases.

Methodology for this release

  1. This release uses the same allocation methodology as the RTS which means that the main allocation method used for ITL1 in the RTS has been replicated for ITL2 and ITL3 in this release.

  2. RTS data is compiled by merging trade data collected by HMRC with employment data from the Inter-Departmental Business Register (IDBR). A business’ trade is allocated to a region based on the proportion of its employees employed in that region. Where a trader is not matched with the IDBR, its trade is matched with Office for National Statistics postcode data to obtain the region in which the Head Office of the EORI / VAT registered business (importer or exporter) is based.

  3. Not all trade can be assigned to one of the 9 English Regions, Wales, Scotland and Northern Ireland. Where appropriate, this is referred to in the tables as the ‘Unallocated Trade’. Unallocated Trade is split into:

  • ‘Unallocated – Known’: where we have virtually full details of the trade, but it is not appropriate to allocate it to a region. This covers:
    • Trade going into or out of the Channel Islands or the Isle of Man;
    • Trade carried out by overseas based traders who have a VAT presence in the UK;
    • Trade carried out by the UK Government; and
    • Parcel post trade that is dealt with centrally (trade collected via customs declarations).
  • ‘Unallocated – Unknown’: This includes:
    • Trade where business details submitted are invalid;
    • Un-registered businesses (trade collected via customs declarations);
    • Private Individuals (trade collected via customs declarations); and
    • Low Value Trade (trade collected via customs declarations).

  1. For specific energy goods only, trade is allocated to the region where the goods enter or leave the UK rather than the location / employment of the business doing the trade. This is because HMRC receives details of the trade in these goods directly from grid operators rather than the business. The goods concerned are Electrical energy, Natural Gas in a gaseous state and Crude Oil exported directly from offshore oil rigs. Crude Oil imported to the UK and exported from terminals is still allocated to the region of the business. Due to the information available we cannot provide this element at any geographical level below ITL1.

  2. The business count is derived from trade declarations and is a count of businesses importing and exporting. Trade declared via Customs declarations will not include businesses whose trade is made up entirely of consignments below the statistical threshold (£873 and 1000kg).

  3. Where businesses have branches in multiple regions a business will be counted as one in every region they have employees. This represents the actual count of businesses in any region. However, it will mean the sum of the trader count for each region will be greater than that for the UK. This is what is called the ‘Whole Number Method’ in the RTS.

  4. This release is categorised by partner country and Standard International Trade Classification, Rev.4. (SITC) at section level (1-digit). The SITC is a relatively broad classification of goods and is not as detailed as the commodity classification available in the OTS.

  5. More information on the RTS and this release can be found in the RTS methodology document.

  1. The ONS also publishes subnational statistics on the value of exports and imports at ITL 1, 2 and 3 levels. However, their release includes both goods and services data, while the HMRC release only includes goods. Another key difference between the two statistics is HMRC report on an International Merchandise Trade Statistics (IMTS) basis but the subnational trade figures produced by the Office for National Statistics (ONS) are on a balance of payments (BoP) basis.

    This means there are numerous different methodologies that contribute to the compilation of each set of statistics, but the key one is HMRC’s are compiled based on goods physically entering or leaving the UK, while the ONS subnational trade are produced on a change of economic ownership basis. It is worth noting that the RTS disaggregated by smaller geographical area statistics exclude non-monetary gold. Please also note that there is a slight variation in regional boundaries in geographical mappers between ONS’ and HMRC’s publications.

Governance

  1. Currently these statistics are labelled as experimental. The reasons for this are: - to allow us to build in improvements to the methodology, data included, visuals, etc.; - to allow external users to provide feedback on the publication so that enhancements can be made to future releases.

    For more information and guidance on the use of experimental statistics, please visit the (Guide to Experimental Statistics) on the ONS website.

  1. HMRC applies Statistical Disclosure Control (SDC) on all its statistical releases to protect our data providers. Therefore, requests for data relating to other geographies or greater detail are also subject to SDC so it is unlikely that these can be provided.

  2. Now that the UK has left the EU, it is important that our statistics continue to be of high quality and are internationally comparable. All releases continue to be produced in accordance with the UK Statistics Authority’s Code of Practice for Statistics as well as internationally agreed statistical guidance and standards.

Statistical contact:
M Mastrangelo
e-mail uktradeinfo@hmrc.gov.uk

Next release: November 2023

If using specific facts contained in this release, please check the information is still current.

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