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Have you adjusted your Microsoft Dynamics solution for Brexit?

Thursday, January 7, 2021

With the coronavirus pandemic dominating the headlines, it’s easy to forget about other things happening in the world. Have you remembered to adjust your Microsoft Dynamics solution for Brexit?

The departure of the United Kingdom (UK) from the European Union (EU) on December 31st, 2020, will impact many businesses operating inside and across UK borders.

From January 1st, 2021, companies who sell or ship goods and services in and out of the UK have to follow the new rules on exports, imports and movement of goods to or from Northern Ireland. If your business performs any of the these activities, you will likely need to make some configuration changes in your Microsoft Dynamics solution.

Implications on VAT

Businesses need to adjust to the changes in VAT and you have to make some adjustments to your ERP system. In the Country table you need to make the following changes:

  1. UK needs to be blank in the “EU Country/Region” field (please make the change after the last “run” of Intrastat declaration has been done).
  2. Check that the country codes used reflects that Great Britain (GB) consists of England, Scotland and Wales, while United Kingdom consists of Great Britain and Northern Ireland.
  3. Northern Ireland gets a new official country code “XI”. Therefore, the country code XI needs to be entered for all customers/vendors/contacts for Northern Ireland. Northern Ireland is part of the EU and needs a checkmark in the “EU Country/Region” field”.

But don’t forget that any services or goods sold prior to December 31, 2020, needs to be invoiced and paid according to the “old” rules.

Check your Intrastat declarations

Please check your setup of the Intrastat declaration so it reports according to the new rules when doing business in the UK:

  • Businesses importing goods into Great Britain needs to prepare Intrastat Report until December 2021.
  • Businesses exporting goods from United Kingdom to EU no longer require Intrastat Reporting.
  • Businesses exporting goods from Great Britain to Northern Ireland no longer require Intrastat Reporting.
  • Businesses involved in moving goods to and from Northern Ireland and the EU will continue with Intrastat Reporting at least until 2025.

Use of Economic Operators Registration and Identification (EORI) Number for UK businesses

From January 1st, 2021, VIES (VAT Information Exchange System) VAT Number Validation Service for verification of VAT Registration Number will only be available for businesses in EU Member Countries and UK businesses will no longer be included in that.

UK businesses will use an Economic Operators Registration and Identification (EORI) number as way of identifying UK businesses or operators who export or import to the EU and it will be required for both customs and VAT documentation. There are three types of EORI numbers:

  • One for business in Great Britain trading with EU businesses
  • One for businesses moving goods to or from Northern Ireland
  • One for businesses making declarations or getting customs decisions in EU countries.

Stay current with the latest information and impact of Brexit

Make sure to visit Her Majesty’s Revenue and Customs (HMRC) website for the latest information and to investigate the impact that Brexit might have on your business. For details on the implications on VAT, we recommend you go to the page with detailed VAT information.

Do you need help with making adjustments in your Microsoft Dynamics solution?

In Microsoft Dynamics 365 Business Central, Microsoft have added a new EORI number field to the Company Information, Customer, and Vendor pages. The field is added to the international version (W1) and is available in all versions for European countries. In the UK version, Microsoft 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 further details please go to Microsoft’s article about the Brexit Impact on Business Central.

Are you using other versions of Microsoft Dynamics NAV or AX you will most likely need to make modifications to your solution and we will be happy to help you with this.

Please don’t hesitate to contact us for guidance or help with making the necessary changes.

 

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