We have done what we can to ensure that we have added as much Brexit support. However, it is important that you review your own needs and business requirements and make sure that you do your own research to ensure that you are ready for Brexit.
This page includes information that you may require if you are selling to or purchasing goods from the EU.
Please visit the following government page to find out more about the new rules when trading with Europe GOV.UK new rules are here. This page includes a Brexit checker wizard and as well as information about what you need to do differently.
In order to make KCC ready for Brexit we are making changes to several areas of the system, these changes will be added into updates. We will produce the guides and videos on how to use these new features, so please keep checking your What's New screen on the Dashboard as this will have details of the changes as well as viewing this page on a regular basis.
What changes are we making to KCC to ensure that it is ready for Brexit?
Please check your Dashboard to view the latest changes
ICN Codes (07/12/2020)
ICN Codes have been added into the system. They are setup in System Setup - System Data and then once added in here can be added to the stock items in their Stock Properties screen. You can also add the following associated information:
- Country of
Manufacture or Origin
- Supplementary Unit Value, this is the size of how you sell the product, for example 1 litre, individually, in pairs, Kg, g, cm etc. If you sell an item in a 1 litre pot and the customer is buying 4 of them, they will receive a total of 4 litres.
- Net Weight.
Harmonisation Codes (10/12/2020)
Harmonisation Codes have been added into the system. Like ICN Codes they are setup in System Data and once added can then be added to the stock items by using the Actions button, see How to Setup and Apply Harmonisation Codes
for more information.
Country VAT (16/12/2020)
Country Specific VAT has been built in to the system. This feature allows clients who are registered for tax in additional countries to set up their KCC system to calculate and apply the relevant sales tax and also to have this information readily available for use in the Tax Register. See How to Setup Country Specific VAT for information on how to set up this feature on your system and How to find out what tax is owed to what country
for configuring the Tax Register to display this information.
At present Country Specific VAT can only be calculated on sales.
SP Ledger (16/12/2020)
There are now extra columns within the SP Ledger to allow for post Brexit tax accounting, these are:
- EC/RC Tax - This option is only intended to be used when processing Purchase Ledgers and will add an entry into the UK VAT Return that will cancel out the VAT amounts by adding the same tax value as a credit and debit, for example when creating a credit note for an EC supplier.
- Service RC - This is used to record VAT on Services received from overseas suppliers as this can be considered as a reverse charge. It will appear on the UK VAT Return as two entries for the same amount; one for a sales invoice and the other for a purchase invoice. Examples are if you use overseas shipping agents, legal services or translation services.
- Less than 135 - If the total value of your whole consignment is under 135 net, then this option should be ticked. The 135 net is the total value of the whole consignment, not just for the invoice that is being posted. The 135 net threshold is not detectable by Khaos Control Cloud, so it`s up to you to ensure this is accurate and applicable before posting.
- EU Import into NI - If you are trading from NI and importing goods from the EU, this option should be ticked. The VAT is accounted for in the same way as it was before Brexit
Brexit information and other areas affected by Brexit changes
Most couriers which now support exports to Europe use Harmonisation Codes, however some use Intrastat Classification Nomenclature (ICN) also known as Commodity Codes.
To make this process simpler here is a list of which codes the most commonly used couriers use, however we highly recommend reviewing this with your courier service provider as the terminology can be confusing.
Please note that not all integrations listed below are available.
Intersoft (Intelligent Shipper)
My DHL API
ParcelForce ExpressLink V14
Yodel Desk Despatch
UPS WorldShip V18
You may be required to configure services specifically for Europe discrete from your Rest of World (ROW) courier services to ensure the correct codes are used.
We have provided a courier option on a per courier basis where the type of code exported can be changed, however Khaos Control Cloud does not validate this information so please ensure the correct codes are being used for the services you are using.
European Imports (excluding imports
into Northern Ireland)
The government is introducing a system of Postponed Vat Accounting for imports both European and ROW, which can apply to consignments over a threshold of £135 Net and this determines how the import is treated with regards to VAT. This affects both Purchase Invoices and invoices entered into the accounts using the SP Ledger.
The £135 is for the whole consignment not just the items that are being booked in. For example, if you order 10 different items at £50 each and delivered 2 of them, you would be still over the £135 as the whole consignment is worth £500.
How the £135 Net threshold applies should be treated on an individual basis for each purchase invoice that you are posting.
For more information check out the following government web pages:
- Where you are importing goods B2B from your supplier, and where both businesses are vat registered, the system uses Reverse Charge VAT.
- Where VAT has been charged by the supplier, these will be treated as a normal UK Vat purchase invoice.
EU - Imports - More than £135 Net
- Import VAT will be posted as Postponed Vat Accounting (PVA) which is similar to reverse charge in how it appears on the UK VAT Return.
- If you're not dealing with Import VAT (no VAT is included and you're not posting import VAT), then this is treated as a UK VAT item, taxable / non-taxable based on user input.
ROW Imports and Exports
- RoW Exports (and sales) remain unchanged.
- RoW Imports follow the same rules as EU including the £135 Net threshold and Postponed Vat Accounting where applicable.
European Sales / Exports
(excluding sales sent from Northern Ireland)
EU - Sales are now zero rated when exported from the UK.
It will be possible to manually apply tax to an order heading for the EU,
by changing the Calculate Tax option on the Sales Order, if enabled the “old” rules
Country Specific VAT rates for Sales
As part of the Brexit preparations Country Specific VAT for Sales Orders will be added as an optional feature to KCC. This allows you to specify tax rates pertaining to different countries which allows the Sales Invoice to default to the tax rate for the country the goods are being delivered and invoiced to.
EU Sales will post the sales figures to UK VAT return as a zero rated sale for statistical purposes as per HMRC guidelines, if country vat for the EU state is in effect.
It will be possible to opt out of this using an option in System Values.
Before using Country Specific VAT, please seek advice from the relevant tax authorities about whether you should register for VAT in other countries and contact our training team to arrange help with configuring this functionality, and ensure your courier export services and options have been discussed with the courier services you are using for your exports.
Once the functionality has been added into KCC we will release the instructions and video to help you set it up.
Country specific VAT for purchases is not supported.
Delivery Duty Paid (DDP) and Delivery At Place (DAP)
There are further considerations which must be discussed with any specific countries tax authority and your relevant courier services before configuring KCC:
- Delivery Duty Paid (DDP) is where you pay the duty on your customer's sales orders instead of the end consumer (your customer). If you wish to offer this service, you may be required to register for VAT in that country of delivery before you can do so. In order to be eligible you will be registered for VAT in that country and as such will need to apply the vat rates for that country.
- Delivery At Place (DAP) is the default for most couriers, and is where the Duty is paid by the end customer upon arrival and does not require you to be registered for VAT in that country
Not all courier integrations within KCC will support DDP / DAP specification at point of export, and this may need to be activated on your account with the courier service provider.
Courier Support for DDP / INCO Terms
The following couriers have been modified to add specific support for INCO Terms e.g. DDP:
- DPD API
- Ship At Ease
Please check with your courier which INCO Term to use.
If you deal with Northern Ireland then you should seek expert advice; broad facilities have been introduced based on our interpretation of the government advice.
- Sales to the EU behave the old way, based on a System Values setting (see previous section) which applies globally to all Sales if activated.
- Imports from EU behave the old way, based on a System Values setting (see previous section) which applies a default which can be opted out of on a case by case basis.
- ROW imports, it’s our understanding that ROW imports can benefit from the Postponed Vat Accounting changes being applied to EU and ROW.
For more information on how this may affect you see
Changes to this area will be coming in January 2021.
The descriptions of the VAT100 Boxes will be changing and we will be expanding the Commit facilities to add wider support for Country VAT.