Support for future legal changes in the UK

SAP Business One Version 10.0 will be the only channel for support of any Brexit related legal changes affecting the UK customers and partners, as main stream maintenance of SAP Business One Version 9.3 ended on June 30th, 2020.

To better address and target the UK’s specific legal changes in the future (e.g. related to VAT, Reporting etc.), a new localisation under name of “United Kingdom of Great Britain and Northern Ireland” (UK) was released with SAP Business One 10.0  for new databases besides the existing and renamed localisation “UK International / Republic of Ireland” (GB). We expect that beyond the year 2021, the new UK localisation will be the only localisation maintained as legally compliant for the country of the United Kingdom. In the year 2021, SAP will equally maintain both UK and GB localisations to be legally compliant with changes affecting the customers in the United Kingdom.

With a brand new “Localisation Migration Utility”, we can quickly migrate company’s database from the current GB localisation to new UK localisation in order to be ready for future legal changes. The tool is released with SAP Business One 10.0 FP 2008 and it should be available until 10.0 FP 2105 including. It will be deactivated with FP 10.0 2108 and higher. This gives partners and customers 12 months from now to migrate any affected database from the current GB to the new UK localisation.

There are also various functionality and settings within SAP Business One 10.0 that can cater for future situations after December 31st, 2020. We strongly advise that you consider any changes in cooperation with your business tax advisors. Please note, that although the UK left the EU, it is not only UK organisations that are affected after the end of transition period expected after December 31st, 2020. EU, and other, organisations dealing with UK organisations will also be affected.

UK Organisations

We would like to draw your attention to the ‘The UK transition’ site maintained by the UK’s government. This can assist your organisation to discover more about the changes and the actions to be taken to prepare your business for changes from January 1, 2021. There are several other implications which will need to be considered that are outside the scope of SAP Business One.

You should bear in mind the following points, in connection with SAP Business One after the end of the UK transition period whose ending is scheduled for December 31st, 2020:

    1. The EC Sales list (EU Sales Report) will become obsolete after December 31st, 2020
    2. Intrastat declarations will become obsolete after December 31st, 2020
    3. Based on advice from HMRC, at the following link:
      1. EU transactions will need to be considered like import/export transactions
      2. VAT Returns will require imports/exports to be reported like how EU transactions are reported before Brexit (included in boxes 2, 4 , 8 and 9)
      3. For VAT reports that include dates before and after the Brexit date, it is advised to set up new VAT Codes for imports/exports to be used in transactions after December 31st, 2020. The VAT Tax Declaration Boxes (and where applicable BAS Codes Definition – MTD relevant solution) will need to incorporate the new VAT Codes.
      4. To correctly handle transactions with the remaining EU countries after the end of transition period, the correct Tax Codes need to be set up in Business Partner Master Data and used on documents (invoices) so that exports from the UK to EU countries are no longer treated and reported as EU-cross-border goods deliveries but as trade with countries outside the EU (like for the United States)
      5. Duty groups may need to be defined so they can be attached to Items that are purchased in the EU-27 countries (the remaining 27 EU member countries) to capture duties in landed costs transactions
      6. Should account determination be based on VAT Codes, then this needs to be reviewed and amended where necessary
      7. It would be advisable to process a billing run for all open deliveries (especially for EU Customers) on December 31, 2020, to avoid having to maintain correct VAT Codes for future dated transactions

NOTE: SAP Business One (partially) supports import declarations which need to be made to release goods imported from countries outside of the EU. You can record customs duty by using landed cost functionality. We strongly advise that your customers engage with Customs Agents to deal with Customs Declaration Forms for goods purchased from EU Countries.

EU-27 Organisations

It is presumed that every EU-27 (the remaining 27 EU member countries) country will be affected by a situation after the end of the Brexit transition period. Any EU-27 organisation which will be transacting with UK organisations will need to consider the effect on EC Sales reports and local VAT reporting requirements. Sales to the UK will no longer be relevant for the EC Sales report. All transactions with UK business partners will need to use a VAT code that applies to third party countries. These transactions may also include landed costs, including customs duties.

Rest-of-the-World Organisations

With the end of transition period, organisations in countries outside of the EU will be affected based on agreements that the UK will put in place with those countries. It is likely that the UK will have to forge new trading agreements with every country, or bloc, outside of the EU. WTO terms may be used as default, or specific terms may be agreed.

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