Posting Date issues in the New Year caused by new setup

VAT Setup

In Microsoft Dynamics 365 Business Central, Microsoft have created a new page called VAT Setup. Amongst other things this holds the new VAT Date controls, the Allow VAT Date From and Allow VAT Date To. These will stop any postings that try to use a VAT Date outside this range, unless the user has been granted an exception on the User Setup page.

User Setup

The User Setup page now has added columns to grant an exception where required to specific users to allow a VAT Date to be used outside the above setting. In the image below, the user is posting into January 2024, but their VAT Dates allow them to also post with a VAT Date that falls into Q4 of 2023, i.e. the period covered by the next VAT return to HMRC. 

Please note:
• This is not VAT advice, this is a review of the apparent behaviour of a new function in the system, if you feel you need VAT advice, please seek this from an appropriate source.
• The examples given here are just for discussion and not recommended setup.

General Ledger Setup

The above setup is only useful if you are using the Default VAT Date field with the option of Document Date, this allows you to post late received purchase invoices and use the actual tax point from the invoice (the invoice date) as the Document Date and have this set the VAT Date field, this now has a control to keep things to the current VAT Period.

Technically this already existed as the field Control VAT Period has options to block posting in closed vat periods or warn when posting into a closed (reported) VAT period.

So, what is the catch?

Well, this feature was available for preview in November but went live in Business Central SaaS during December (BC23.1). When it was enabled by Microsoft it inherited whatever dates were in the General Ledger Setup, even if the VAT Date functionality was turned off! This means that now as users return from their break over the festive period and begin working, posting errors may happen as the company will be using January as its posting date allowed period but the VAT Setup page that they won’t be aware of will still have the December dates that it inherited, thus preventing posting. We have had this with four of our customers today (2nd January 2024), both with different setups but the same end result, unable to post invoices. We have seen this cause issues both when the Default VAT Date field is set to Posting Date and also surprisingly when the VAT Date Usage field was set to Disabled.

So how do we fix this?

Thankfully the fix is simple, you need to update this new page as part of your month end / period end process, simply keep the dates in the VAT Setup page either in line with your posting date control or in line with your next VAT return depending on your current process. It should be a one-off error as it was caused by this new page inheriting the dates set on the General Ledger Setup. If you have the VAT Date Usage field set to Disabled, you will not see the VAT Date fields on the VAT Setup page, so you will have to briefly enable this feature, clear the fields then disable it again. To be safe, we would suggest pausing all activity when you do this, just to avoid creating new documents with a different VAT Date.

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