The departure of the United Kingdom (UK) from the European Union (EU) will impact many businesses operating inside and across UK borders. As of January 1, 2021, it is likely the impact on UK businesses will revolve around these areas:
- Importing goods from the EU
- Exporting goods to the EU
- Moving goods to or from Northern Ireland
If your business performs any of the above activities, you will likely need to make some configuration changes in Business Central.
Trade Across Borders and the Use of Economic Operators Registration and Identification Numbers after Brexit
Businesses in the UK are now subject to more administrative burdens when exporting and importing goods across borders, and one of these areas is with Customs. Although Business Central does not support Customs documents by default, we have added a new EORI number field to the Company Information, Customer, and Vendor pages. This field is added to the international version (W1) and is available in all versions for European countries. In the UK version, we have also added a Supplementary VAT Reg. Number field on the Company Information page for scenarios where you must provide more than one of VAT registration number. For example, this number is typically on invoices, depending on the countries/regions of the specific trade and on the movement of goods and services.
Trade Involving Northern Ireland
If part of your business is in Northern Ireland and you trade across EU borders or other European countries, or your business is in one of these countries and trade with a company or move goods into Northern Ireland, make sure to do the following:
- Add your EORI number and/or Supplemental VAT Registration number (starting with “XI”) on the Company Information page.
- Add Northern Ireland to the Countries/Regions list.
- Specify this region on the relevant trading partners, such as customers and vendors.
- Specify an EORI number for your trading partners, such as customers and vendors.
- Specify Northern Ireland on the Locations page as the region for any warehouse locations you have in Northern Ireland.
Northern Ireland will have a dual position in the EU in areas related to the Customs Union, Single Market, VAT regime, and in the UK’s equivalents for goods (only). Goods moved in or out of Northern Ireland to or from European countries must be reported on Intrastat. To handle this requirement, use Intrastat journals in Business Central.
Because Intrastat reporting is no longer needed for regular export and import for the UK, you may need to filter or delete such item movements on the Intrastat Journal when lines are suggested in the journal. To make this easier, we have added a Location Code field on the Intrastat Journal Lines so you can filter lines based on their Ship-from or Receive-to location.
Brexit: VAT Impact on Moving Goods In and Out of Northern Ireland
If your business has a warehouse in Northern Ireland, goods moved to that location will be subject to VAT as of January 1, 2021. When those goods are sold, VAT can be reclaimed. This and other scenarios involving the VAT process changes are not supported by standard features in Business Central. Although you may be able to configure Business Central for your business, we recommend that you engage your Business Central reselling partner to help ensure that your configuration changes are compliant and optimal for the scenarios that are specific to your business. Your partner can also refer you to product add-ons that you might need.
Frequently Asked Questions
- I’m using Business Central online – where is my data stored?
The data for UK customers using Business Central online is stored in data centers in the UK. If you create another Business Central environment in the same Azure AD tenant, and choose another country for this environment, the data will be stored in data centers that serve that specific country. In most cases, those data centers are outside the UK, which helps ensure optimal data residency and performance.
- Does Business Central support legislation in the United Kingdom?
In many cases, yes. As with all countries for which Microsoft provides a localized version, we follow the impact of local and EU-wide legislation and evaluate how we can support our customers. The responsibility for compliance rests on the individual business in a country, but we provide tools and features that can help our customers meet regulatory requirements, within the confines of our product strategy. A good example of that is our feature for Making Tax Digital, which makes VAT reporting easier and fully digital. There are, however, cases where regulations may require other feature support. For example, if regulatory changes impact a vertical industry, such as construction, we expect that the Microsoft Independent Software Vendor (ISV) who provides a solution that extends Business Central for that industry will deliver the features needed to comply. However, the business who uses the solution is responsible for compliance.