Dynamics 365 Business Central

Dynamics 365 Business Central – How to post Purchase Invoices for Lease Cars using the non-deductible VAT feature

Gavin WhittakerLeave a comment

Introduction

If you lease a car through your business, you can only reclaim 50% of the input VAT on the lease cost unless you can demonstrate that it is used exclusively for business purposes. (i.e. a pool car or company van)

Therefore even though we still have to post the Purchase invoice at its full amount, including VAT, we can only reclaim a portion of that VAT. As a result, when posting the Purchase invoice we need a method to expense the amount of VAT we cant reclaim, while ensuring that only the reclaimable portion is included in the VAT Return.

In this post I’ll go through how you can configure VAT in Business Central to accommodate this using the “Non-Deductible VAT” feature.

VAT Setup

The first thing to do is to switch on the “Non-Deductible” feature via the “VAT Setup” page

Enabling this gives more features in the “VAT Posting Setup” page, which we will utilise and look at in more detail later.

VAT Product Posting Group

The next step is to create a new “VAT Product Posting Group” that we’ll select when posting our lease car Purchase Invoices.

In this case I’ll call is VAT20LEASE.

Assign VAT Product Posting Group to GL Code

Next I’ll assign this new VAT Product Posting Group to my Lease Vehicles GL code as per below:

This will now be selected by default when I use this GL code directly in a Purchase Invoice.

VAT Posting Setup

We’ll now add the new VAT Product Posting Group into our VAT Posting Setup.

Since we have switched on “Enable Non-deductible VAT” we have extra features we can utilise for this new VAT Business/Product combination as per below:

If we break this down we can see the following:

Firstly, now we have enabled the “Non-Deductible VAT” feature we have three new options. These are shown above is point 3, 4 and 5. (click to enlarge the image)

In point 3 we have the option to “Allow” non-deductible VAT on this VAT combination. If this is set to “Allow” you can specify the non-deductible percentage, which we have set to 50%. Finally in point 4 you can either select a GL code to post the non-deductible VAT, such as an “Irrecoverable VAT” GL code, or you can leave it blank, so the expense is posted to the same expense code used on the Invoice.

Post a Purchase Invoice

Now we have this all configured we’ll now create a Purchase Invoice for a lease car for £1000.00+£200.00 VAT, which totals £1200.00.

Remember, although we still have to pay £1200.00, we can only reclaim 50% of the VAT.

When entering the Purchase Invoice it shows as per below

If we click “Invoice > Statistics” we can see the full VAT amount of £200.00 but we also see that £100.00 is “Non-Deductible”

The VAT Entries for this Purchase Invoice also only record £100.00 to be reclaimed

And finally the GL Entries only show £100.00 hitting our VAT GL account, with the other £100.00 hitting the Lease car expense

Remember we could have specified an “Irrecoverable VAT” code in the “VAT Posting Setup” for this if we preferred.

VAT Statement

The final piece of the jigsaw to ensure we add the new combination on the VAT Statement so its included in our calculations and submission.

I therefore included it in the calculations so its picked up in the relevant boxes as per below

This may differ from your VAT statement as its taken from my demo and then I added the new VAT Product Posting Group

Conclusion

Previously we’d have had to manage this manually using journals however we can now utilise the “Non-Deductible” features to assist when posting Purchase Invoices for Lease Cars in Business Central.

Thanks for reading!

Dynamics 365 Business Central – A method to check when an Environment was created in the Admin Centre

Gavin WhittakerLeave a comment

Introduction

Recently I needed to find out when an environment had been created in Business Central. In this post I’ll explain how this can be achieved via the “Operations” page in the Business Central Admin Centre.

The Admin Centre

The Business Central Admin Centre allows you to perform various administrative tasks on your Business Central environments, including creating new ones.

You can access this several ways, with the most common methods being via the “Settings” option in Business Central as per below

Alternatively you can add the word “Admin” to the end of the Business Central URL as shown below:

https://businesscentral.dynamics.com/<tenantid>/admin

Please note in both cases you need special permissions to be able to access the Business Central Admin Centre. I explain more about this and the Admin Centre in general in this post and YouTube video

Once in the Admin Centre you can find out when an environment was created by clicking “Operations” (1), then selecting the environment you are interested in (2), next selecting “All” (3), and finally clicking “Filter” (4) as per below

Here I can now see that the environment was created on the 22nd of February 2024 and also which user created the environment.

You can also see other useful information like when the environment has been updated, when an app was installed, or an environment copied etc

Conclusion

This is a quick method for checking when an environment was created. Its also a great example of Microsoft responding to community input through the Microsoft Ideas site, where this idea was originally proposed. You can find the idea and Microsoft’s response here.

Thanks for reading!

Dynamics 365 Business Central – How to quickly split the balance of a General Ledger account across Dimensions using a Recurring General Journal

Gavin WhittakerLeave a comment

Introduction

At the end of a period it maybe necessary to split the balance of an General Ledger account across dimensions. This might be useful if you accumulate costs in a General Ledger account and only split those across cost centres at the period end.

In this post I’ll go through how this can be achieved quickly and easily using the Recurring Journal.

Recurring Journal

The recurring journal in Business Central provides the means of handling repetitive journals that occur on a regular basis.

One example might be a monthly depreciation journal or recurring revenue and expenses. (although I’d hope anyone would be using the Fixed Assets module for monthly depreciation 😊). Typically you’d be using the same or very similar amounts so would use a “Recurring Method” of “Fixed” or “Variable” for those journals.

However there is a “Recurring Method” of “Balance” that provides the ability to transfer the balance of an General Ledger account to another General Ledger account, or more interestingly, split the balance of an account across dimension values.

For example, let’s say I’ve been accumulating “Office Supplies” expenses under one General Ledger code and at the end of the month I want to split this by departmental cost centres.

This see how this works with a Recurring General Journal.

Worked Example

Through the month I’ve accumulated £1000 worth of costs in the “Office Supplies” account.

If I look at a “G/L Balance by Dimension” you can see I have no Dimensional analysis.

At month end I now want to split these costs across my departments. To do this I open the “Recurring General Journal” page, select the “Balance” recurring method, and pickup the “Office Supplies” account. (Note I don’t enter any amount in the journal)

Next we’ll allocate the balance across the “Department” dimension. I want to allocate 20% to the Sales department, 50% to Production and 30% to Admin.

To do this click “Allocations” in the ribbon and pickup the Office Supplies General Ledger account and enter 20% percentage and click “Dimensions”

I then select “Department” as the Dimension Code and “SALES” as the Dimension Value.

I repeat this for Dimension Values “ADM” and “PRODUCTION”, each time entering the Office Supplies General Ledger account, then clicking “Dimension” in the ribbon, and picking up the relevant dimension value.

I now have the allocations I require as per below.

Now when I preview post the journal I can see how this will now be split over the various departments

Finally when I view the “G/L Balance by Dimension” I can see the split across my Department dimension

Conclusion

Although I could have used a normal “General Journal” for this entry, this method shows how you can utilise the “Recurring General Journal” to split costs across dimensions, without needing to know the actual balance of the account therefore reducing errors and saving time.

Thanks for reading!