Brexit Impact on Dynamics 365 Business Central
If your business imports/exports goods from the EU or move goods to/from Northern Ireland then you will likely need to make some configuration changes in Dynamics 365 Business Central.
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 Dynamics 365 Business Central.
Note: Make sure to check with Her Majesty's Revenue and Customs (HMRC) for the latest information and to investigate the impact that Brexit might have on your business: https://www.gov.uk/transition. Microsoft will continuously monitor legislation changes due to Brexit and assess potential product impact.
Trade Across Borders and the Use of Economic Operators Registration and Identification Numbers
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 Dynamics 365 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.
Please contact us for assistance with adding the EORI number or Supplementary VAT Reg. Number to the relevant reports.
Note: If you are using Dynamics 365 Business Central on-premises, to use the EORI number, Supplemental VAT Reg. No. and Location Code fields you must install the January 2021 Cumulative Update.
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 Dynamics 365 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.
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 Dynamics 365 Business Central. Although you may be able to configure Dynamics 365 Business Central for your business, we recommend that you engage your Dynamics 365 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 Dynamics 365 Business Central online – where is my data stored?
The data for UK customers using Dynamics 365 Business Central online is stored in data centres in the UK. If you create another Dynamics 365 Business Central environment in the same Azure AD tenant, and choose another country for this environment, the data will be stored in data centres that serve that specific country. In most cases, those data centres are outside the UK, which helps ensure optimal data residency and performance.
Does Dynamics 365 Business Central support legislation in the United Kingdom?
In many cases, yes. As with all countries for which Microsoft provides a localised 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 Dynamics 365 Business Central for that industry will deliver the features needed to comply. However, the business who uses the solution is responsible for compliance.
If you have questions regarding the localisation of Dynamics 365 Business Central, please contact your account manager today.