VAT for Brexit – the solution


Why is dealing with VAT and Brexit so complicated?

Over the last few years, Brexit has added an extra layer of complexity for businesses reporting and calculating VAT. At present, Northern Ireland is in between the Rest of World & Europe when it comes to VAT and as of 2022, new rules have now been enforced for VIES & INTRASTAT reporting.

Not only are all these issues complex, along with VAT RTD, accounts are becoming more and more of a chore for people working in the department.

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How can Herbst solve your VAT complexities?

Herbst Software not only develops software, but also supports it. Having spent the last few years researching all things VAT and Brexit, talking to Revenue and listening to your feedback, our biggest release EVER, (which has taken approximately one year to incorporate changes we felt were needed) is now ready to facilitate and automate all the new VAT circumstances and complexities that have come alongside Brexit.

You can now find version 2.0.105XX, where we have greatly extended the internals of our system to facilitate push button reporting for all your VAT issues.

In summary, the development and extension of our system has been expanded to facilitate and automate VAT reporting.

What’s new on the latest version? 

Within the core ‘Herbst Insight’, there is a Nominal Ledger working with VAT exclusive logic. The nominal ledger specialises with a lot of industries orientated in the B2B environment where VAT automation is important, however the ability to isolate VAT figures from everything else is also essential.

This means that we add VAT on to the cost / price rather than vice versa.

Although Herbst Insight does have a POS module (Point of Sale / Till for trade), the POS was developed specifically to facilitate virtual retail VAT inclusive at front end.

Configuration and preparation required

This release will mean a little more setup when working with VAT issues that come alongside Brexit. However moving forward, you and your users will find it very intuitive as you get familiar with things. In the long term, it will certainly save someone in your company weeks if not months each year (especially when audited)!

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Key features of our new release

The key aspect of the new design is what we like to call ‘VAT Triangulation’.

VAT Triangulation is about a transaction needing to have the ability to hold all the details for where you’re invoicing from / to but also where you are physically moving the product from / to.

To do VAT Triangulation we use T-Trader.

T-Trader identifies the physical movements on the document. T-Trader now has superseded Consignee, which does all the same things and a lot more. A name change to T-Trader was required as leaving as Consignee would have been misleading.

Another new feature is that you now have Trader/ Product VAT Profiles which auto switches VAT on documents according to Customer, T-Trader,  Depot, Service or Products.  Complete support is also implemented for ‘Sites’ (this is particularly important for those of you with Customers and / or Suppliers to which you need to work with a large number of their locations).

All above features combined with an extended VAT table, allows one to define postponed accounting, Reverse Charge VAT, VAT RTD flags (annual Return of Trading Details) and brings everything together.

This may all sound very complicated…

However, it’s actually only as involved as your business requires and it automates business procedures throughout managing VAT and Brexit, which can be even more daunting.

We took into consideration the political situation of Brexit and have designed an infrastructure flexible enough to handle and automate today’s complicated cross border rules.

There is a possibility that there will be more changes coming, so  decided to modernise all of our systems so they are able to deal with changing circumstances. We hope this will help us be more future proof for when further changes come down the road as a result of Brexit.

Short Term inconvenience for long term gain

Unlike most of our new releases, a certain amount of preparation and configuration will be required when you are applying this new version for VAT. Defaults and quick edits have been included to simplify the process, but still, apologies are required as a certain amount of configuration and learning is necessary, and you will need to read the documentation.

New installs will have ready made defaults however for existing companies, some of the new features just can’t be automated during the conversion. Of course, if you only have one depot and don’t export / import, it’s all a little easier, as you only need to use what you require and once set up you will be extremely happy that you have it.

We very much hope that you reap the benefits of our new VAT features and implementations when dealing with accounts throughout a time of Brexit.


Other Blog posts that you might be interested in:

Trading Post Brexit – How Will It Affect My Business?

All you need to know about credit control




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