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Reverse charge VAT in GB : purpose of GL setup, P&P setup, S&R setup

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Posted on by October Sky

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I am setting up Reverse charge VAT for the GB environment but it looks like most of the configuration and calculation is performed by the settings in the VAT posting setup table.

Therefore, I am somewhat confused as to the purpose and reasoning as to why there are various setups required in the General ledger setup, Purchases & Payables setup and Sales & Receivables setup.

GL setup -->

P&P setup -->

S&R setup -->

Microsoft mention these fields but makes no mention of the configuration of the VAT posting setup. Thus, all round confusion. Perhaps someone can explain.

https://learn.microsoft.com/en-us/dynamics365/business-central/localfunctionality/unitedkingdom/how-to-set-up-reverse-charges-on-vat

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AndrewThomas81 2,270 on at

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The EU reverse charge setup in the VAT Posting Setup only refers to legacy setup pre-brexit. So I can understand why this could be confusing.

What are you trying to setup?

Kind Regards

Andrew Thomas FCCA MCP
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OussamaSabbouh 17,956 Super User 2026 Season 1 on at

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Hello,

The easiest way to see it is this: VAT Posting Setup is the accounting engine, while the GB Reverse Charge fields in G/L Setup, Sales & Receivables Setup, and Purchases & Payables Setup are the local rule/default controls. The VAT Posting Setup decides the real VAT calculation type, VAT %, and which G/L accounts are posted, including the Reverse Charge VAT account. The GB setup fields are there to control when/how the UK reverse charge feature applies, such as threshold logic, default reverse charge VAT posting group, domestic customer handling, and invoice wording. So yes, the final posting is mainly driven by VAT Posting Setup, but Microsoft’s UK reverse charge article is focusing on the extra GB localization setup around it, especially for goods subject to reverse charge. In practice, you need both: create the correct VAT posting setup lines with VAT Calculation Type = Reverse Charge VAT, then maintain the GB reverse charge setup fields and mark applicable items using Reverse Charge Applies.

Regards,
Oussama Sabbouh

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