Khaos Control includes functionality for managing international sales, purchases, VAT, customs invoices and courier exports following the UK's departure from the EU.

Important: Tax, VAT, customs and Northern Ireland arrangements have continued to change since the original Brexit functionality was introduced. This article explains the functionality available in Khaos Control. Always check current GOV.UK guidance and take appropriate tax or customs advice before deciding how a transaction should be treated.
In particular, the Windsor Framework has replaced the previous Northern Ireland Protocol arrangements, so older Brexit guidance relating to Northern Ireland should not be relied on as current tax or customs advice.

The functionality described in the original release was introduced for Khaos Control version 8.197.90 and above.

Questions and answers

For additional guidance about the functionality introduced following Brexit, see Brexit - Questions and Answers.

System Values

The original Brexit options are available under:

System Operations > Edit System Values > Accounts > Brexit

These include:

Brexit Features Active

Enables the functionality introduced for use after the end of the Brexit transition period on 1 January 2021.

Test Mode

This option was provided so businesses could test Brexit functionality before 1 January 2021.

Selling from Northern Ireland to EU

When enabled, sales to EC companies are treated using the system's previous EU behaviour and VAT is applied.

Important: This is a global setting. Only use it where your Khaos Control configuration and current tax requirements support this treatment.

Importing from EU to Northern Ireland

When enabled, Purchase Invoices from EC companies use the system's previous EU treatment and EC VAT behaviour.

This option is intended for systems where purchases are received into Northern Ireland.

Print Customs Invoice for Northern Ireland postcodes

When enabled, invoices printed through Sales Invoice Manager for applicable Northern Ireland addresses use the Customs Invoice.

Northern Ireland: Current arrangements are governed by the Windsor Framework. GOV.UK maintains current guidance covering customs, VAT and movements of goods into, out of and through Northern Ireland. [gov.uk]

Basic Reports

Customs Invoice

Khaos Control can automatically use a Customs Invoice for selected countries.

The Use Customs Invoice option is configured against the required country under:

System Data > Countries

When enabled for the relevant invoice or delivery country, actions that would normally produce an invoice, including the email trigger, use the Customs Invoice instead.

For setup instructions, see How To: Ensure that Customers from a Specified Country use the Customs Invoice.

Information available on the Customs Invoice

Information held under Stock > Detail > Accounting can include:

ICN Code
Country of Manufacture
Net Weight
Harmonisation Code

The company's EORI number is taken from:

System Operations > Edit System Values > General > Your Company

Applying a supplied Customs Invoice template

If you have been supplied with a Customs Invoice Basic Report template:

Save the file in the location used to store your Basic Reports, commonly the K: drive.
Open Basic Reports Setup.
Select the Customs Invoice.
Use the green folder button at the bottom of the screen.
Browse to and select the Customs Invoice template you saved.
Test the report in your Test system before using it on your Live system.

Standard Invoice

Basic Reports can also be configured to include international shipping information on your standard invoices.

See:

Courier Exports

International shipments can require item-level customs information that was not supported by some older Khaos Control courier integrations.

Some integrations were therefore replaced or updated with newer Neo or API-based versions.

Important: If your international courier export is not producing the required information, check that you are using a current supported version of that courier integration. Older versions of an integration may not support all the information required for international shipping.

Courier configuration is managed through the Courier Options Dialog.

For known issues, see Common Courier Gotchas.

Harmonisation and ICN Codes

International courier services may require a Harmonisation Code or an Intrastat Commodity Nomenclature (ICN) Code.

Khaos Control provides functionality for supported courier integrations to use either type of code.

Important: Khaos Control does not determine which commodity code your courier requires. Confirm the requirements directly with your courier before configuring your services.

You may also need separate courier services for European and Rest of World destinations, depending on the courier and your configuration.

Courier development changes

Several changes were originally introduced to support international exports.

Selecting ICN or Harmonisation Codes

Supported courier configurations can include an option to choose whether Harmonisation Codes or ICN Codes are exported.

The original change applied to:

DPD API
Ship@Ease
Hermes v3
Intersoft/Intelligent Shipper
MyDHL
Parcelforce ELv14
Secured Mail
ShipEngine
ShipTheory

If no option is selected, the original default behaviour is to use the Harmonisation Code.

Default telephone numbers

For supported integrations, Khaos Control checks telephone information in this order:

Contact Tel 1.
Contact Mobile Tel / Tel 2.
Address telephone number.
Default telephone number.

Default email addresses

Email information is checked in this order:

Contact email.
Address email.
Default email.

Non-physical stock

Stock marked as Non Physical under:

Stock > Detail > Options

is excluded from the relevant courier export data.

DDP and DAP

Some Khaos Control courier integrations have specific support for INCO Terms, including DDP.

The original integrations identified as having this functionality include:

Intersoft / Intelligent Shipper
DPD API
DPD Ship@Ease Neo
MyDHL
SecuredMail
UPS WorldShip v18 (Neo)

Not every courier integration supports DDP or DAP at the point of export. Courier account configuration may also be required.

Confirm the required INCO terms with your courier before configuring Khaos Control.

Harmonisation Codes

From Khaos Control 8.197.90, Harmonisation Codes no longer have to be defined against Level 2 Stock Types, and a default Harmonisation Code can be used.

There are three stages to configuration.

1. Create the Harmonisation Code

Go to:

System Data > International > Harmonisation Codes

See How To: Create a Harmonisation Code.

2. Map the code to a Stock Type, if required

You can optionally map a code to a Level 2 Stock Type.

This can make managing large numbers of codes easier because the Harmonisation Code list presented against a stock item can be restricted to codes associated with that item's Stock Type.

See How To: Map a Harmonisation Code to a Stock Type.

3. Assign the code to the stock item

See How To: Link Harmonisation Codes to Stock Items.

Importing Harmonisation Codes

If you have the Stock Import Tool enabled, you can also use it to import Harmonisation Codes.

See How To: Import your Harmonisation Codes.

Intrastat ICN Codes

ICN Codes are used by Khaos Control's Intrastat functionality.

For setup instructions, see How To: Setup Intrastat ICN Codes.

You can assign an ICN Code to stock:

Individually under Stock > Detail > Accounting.
To multiple selected stock items using the block update functionality.

For the second option, see How To: Block Update Selected Stock Items.

Country of Manufacture

Set the Country of Manufacture for a product under:

Stock > Detail > Accounting

The field is available below the International Harmonisation Commodity Codes button.

Some courier integrations use this information as the Country of Origin or Country of Manufacture when creating an international shipment.

Check with your courier to confirm the data required for the services you use.

Accounts

Intrastat

Where you need to report imports through Khaos Control, open the Intrastat report and select the Imports (PO) option.

Your reporting obligations depend on your circumstances, so confirm the applicable requirements before relying on the report.

SPLedger

Khaos Control's SPLedger includes VAT and tax options introduced or used as part of the original Brexit functionality.

For detailed scenarios, see How the SPLedger VAT and Tax Options Work.

Less than £135

The Less than £135 option relates to the value of the whole consignment, rather than simply the Purchase Invoice or part of the consignment being received.

For example, if you order 10 items at £50 each, the complete consignment is worth £500. Receiving only two of those items does not reduce the original consignment value to £100 for this purpose.

The £135 threshold remains relevant to current UK VAT rules in particular low-value import scenarios, but its application depends on the type of transaction. Current GOV.UK guidance continues to distinguish consignments worth £135 or less from higher-value consignments. [gov.uk], [gov.uk]

Important: Khaos Control cannot determine whether the £135 treatment applies to your particular transaction. Confirm the correct VAT treatment before posting.

EU Import into NI

The EU Import into NI option was introduced for businesses trading from Northern Ireland and importing goods from the EU.

Because current Northern Ireland arrangements are governed by the Windsor Framework, confirm the correct treatment using current guidance before processing these transactions. [gov.uk]

EC/RC Tax

EC/RC Tax is intended for use when processing Purchase Ledger transactions and creates corresponding tax entries for the UK VAT Return where applicable.

RC VAT

RC VAT can be used to record VAT on qualifying services received from overseas suppliers where reverse charge treatment applies.

Important: The correct use of EC/RC Tax, RC VAT and other VAT options depends on the transaction. Check current HMRC guidance or take professional tax advice if you are unsure.

Imports and Exports

The following information describes how Khaos Control supports these transactions. It should not be treated as a substitute for current tax advice.

Consignments of £135 or less

Khaos Control contains functionality to identify qualifying consignments below the £135 threshold.

Current GOV.UK guidance continues to use the £135 consignment threshold for specific low-value import and VAT arrangements. [gov.uk], [gov.uk]

For the Khaos Control process, see How To: Post a Purchase Invoice for an EU Consignment worth less than £135.

Consignments over £135

For the Khaos Control process, see How To: Post a Purchase Invoice for an EU Consignment worth more than £135.

Current GOV.UK guidance states that the normal VAT rules apply to relevant consignments worth more than £135. [gov.uk]

For older invoices dated before the Brexit transition, see Brexit - Questions and Answers.

Country Specific VAT for Sales

Khaos Control's Country Specific VAT functionality allows different tax rates to be configured for different countries.

For current Khaos Control configuration guidance, see How To: Setup Country Specific VAT.

Before defining country rates, enable Country Specific VAT under:

System Operations > Edit System Values > Accounts - Sales.

For Khaos Control 8.201 or later, the country setting is called Enable Country VAT rather than Force Country VAT Rate. Khaos Control also recommends using the Default option for Country VAT rates on these versions.

Depending on your version and configuration, rates can be associated with:

The destination country.
Level 2 Stock Types.
Individual stock items.

In version 8.201 or later, you do not need to add the rate to individual Stock Types or Stock Items when an appropriate Country Rate has been marked as Default.

Important: Country Specific VAT for purchases is not supported.

Before enabling Country Specific VAT, confirm whether you need to register for VAT in the countries where you sell and ensure that your courier and export configuration meets your requirements.

Northern Ireland

Extra care is needed when configuring Khaos Control for businesses that trade with or through Northern Ireland.

Since the original Brexit functionality was released, the Windsor Framework has replaced the old Northern Ireland Protocol and introduced new arrangements for moving goods.

Current government guidance covers areas including:

Movements between Great Britain and Northern Ireland.
Customs, VAT and excise.
Goods moving into and out of Northern Ireland.
Proof of Union status.
Trader support.

Use the current GOV.UK guidance for moving goods into, out of or through Northern Ireland before deciding how your Khaos Control options should be configured.

Brexit