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UK Localisation

What a UK company code needs in SAP S/4HANA: HMRC reporting and Making Tax Digital, UK payment formats, CIS withholding tax and the fiscal year.

  • VAT and MTD
  • CIS
  • Bacs · CHAPS · Faster Payments
  • DRC

By · Updated

At a glance

Country code
GB · GBR · +44
Currency
GBP (£) · 100 pence
Tax authority
HMRC
VAT
20% · 5% · 0%
Corporation tax
25% main · 19% small profits
Personal tax year
6 April – 5 April
SAP fiscal year variant
K4 or V3

Overview

The UK is one of the lighter SAP country versions. The standard localisation covers most requirements with little configuration, and the work sits in three areas:

  • Financial accounting

    UK GAAP or IFRS, the fiscal year variant and, when needed, a parallel ledger.

  • Tax

    VAT under Making Tax Digital, CIS withholding tax and the statutory reports in DRC.

  • Treasury

    Bacs, CHAPS and Faster Payments, and bank statements in CAMT.053 or MT940.

Four nations, one country version

Dotted map of the United Kingdom showing England, Scotland, Wales and Northern Ireland, with London marked; Ireland in grey
  • England
    English
  • Scotland
    English, Scottish Gaelic
  • Wales
    English, Welsh
  • Northern Ireland
    English, Irish. EU VAT rules for goods (Windsor Framework): XI VAT number and EC Sales List.
  • London, the capital
Ireland (grey) is not part of the UK and is shown for context.

Currency

Legal reports are in pound sterling (GBP, £). No hard or index currency is required; groups usually add their group currency. Companies can trade in any currency, but report and pay tax in GBP.

Did you know? £1 is 100 pence (1p, 2p … 50p), and a pound is a “quid”, as a dollar is a “buck”.

Language

English. Install other logon languages only if users need them.

Did you know? Welsh, Scottish Gaelic and Irish are spoken in parts of the UK too — see the map.

HMRC and Making Tax Digital

HMRC (His Majesty’s Revenue and Customs) is the UK’s tax, payments and customs authority: the government department that collects taxes and runs the tax system.

Making Tax Digital (MTD) moves tax records and returns into software. Businesses keep digital records and send their returns to HMRC through an API, which brings the tax system closer to real time and cuts avoidable errors.

Making Tax Digital, step by step

  1. Apr 2019Live

    MTD for VAT

    VAT-registered businesses above the VAT threshold, then £85,000.

  2. Apr 2022Live

    MTD for VAT for all

    Every VAT-registered business, whatever its turnover.

  3. Apr 2026Live

    MTD for Income Tax

    Sole traders and landlords with income over £50,000 send quarterly updates.

  4. Apr 2027Next

    Threshold £30,000

    More sole traders and landlords join MTD for Income Tax.

  5. Apr 2028Planned

    Threshold £20,000

    The last announced step for MTD for Income Tax.

  6. Apr 2029Planned

    Mandatory e-invoicing

    Structured e-invoices for all B2B and B2G VAT invoices, over Peppol.

What it means in SAP

  • VAT Return through DRC

    The GB VAT Return is generated in the Run Statutory Reports app and sent to HMRC’s MTD API.

    • GB_VAT_DCL
    • JSON

  • MTD for Income Tax

    Covers individuals — sole traders and landlords — not companies. A company code’s setup does not change.

  • E-invoicing from April 2029

    All B2B and B2G VAT invoices become structured e-invoices exchanged over Peppol. Plan the scope in SAP Document and Reporting Compliance against HMRC’s latest guidance.

Financial accounting

Listed groups prepare consolidated accounts under UK-adopted IFRS. Most other companies use UK GAAP: the Financial Reporting Standards (FRS) issued by the Financial Reporting Council, which change often.

In SAP: when the group reports IFRS and the UK company files under FRS 102, a parallel ledger keeps the UK GAAP valuation.

New from 1 January 2026

The FRS 102 periodic review brings most leases onto the balance sheet (right-of-use asset and lease liability) and a five-step model for revenue, close to IFRS 16 and IFRS 15.

Did you know? FRS 102 is built on IFRS for SMEs, so UK GAAP is principles-based too. The “rules versus principles” contrast describes US GAAP and IFRS.

UK GAAP standards
StandardWhat it covers
FRS 100Application of Financial Reporting RequirementsWhich framework an entity applies
FRS 101Reduced Disclosure FrameworkIFRS measurement with fewer disclosures, for group companies
FRS 102The Financial Reporting Standard applicable in the UK and Republic of IrelandThe main UK GAAP standard
FRS 103Insurance ContractsInsurers reporting under FRS 102
FRS 104Interim Financial ReportingHalf-year and other interim reports
FRS 105The Financial Reporting Standard applicable to the Micro-entities RegimeThe smallest companies

Business partner master data

UK business partners are identified by their VAT, company or tax reference numbers, kept in the business partner’s tax numbers. SAP offers six UK tax categories.

CategoryNumberValid forUsed in
GB0VAT registration numberIssued to businesses registered for VATCompaniesCustomer and supplier e-invoices
GB1Passport numberNatural personsEmployee master record
GB2National Insurance numberSocial security, also used for some tax purposesNatural personsEmployee master record
GB3Company registration number (CRN)Registration with Companies HouseCompaniesStatutory reports
GB4Unique Taxpayer Reference (UTR)Needed to file a tax returnCompanies and individualsStatutory reports
GB6XI VAT numberGoods trade under the Windsor FrameworkCompaniesNorthern Ireland sales

Format (GB0, GB3, GB4, GB6): up to 14 characters, starting with the 2-letter prefix (GB, or XI for Northern Ireland), with no spaces.

Individuals: tick the Natural person field before entering GB1 or GB2.

Where to maintain it

  • BP
  • Manage Business Partner Master Data
  • Role FLVN00 Supplier (Fin. Accounting)

  1. Tax numbers

    Identification › Tax Numbers

    Tax category GB0 to GB6 and the number.

  2. Withholding tax

    Company Codes › Withholding Taxes

    Withholding tax type and code, and “Subject to withholding tax” so the type can be picked on the invoice.

  3. CIS check details

    Company Codes › Vendor: Country-Spec. Enh. 2 › Great Britain CIS Check

    Business type, verification status, the verification number from HMRC and the tax status (rate to deduct).

Treasury: payments and bank statements

SAP’s UK localisation covers the payment formats the main UK banks accept, for supplier and employee payments.

  • Lloyds Bank
  • Barclays
  • HSBC UK
  • NatWest (incl. Royal Bank of Scotland)
UK payment schemes
SchemeSpeedLimit per paymentTypical use
BacsBankers’ Automated Clearing Services3-working-day cycle£20m (£999m for bank and government users)Payroll and supplier payment runs, Direct Debits
Faster PaymentsFaster Payment SystemSeconds, 24/7 (at most 2 hours)£1m scheme limit; banks often set lessUrgent and one-off payments
CHAPSClearing House Automated Payment SystemSame working dayNo limitHigh-value, time-critical payments
SWIFTInternational transfers1 to 5 daysNo scheme limitPayments abroad
SEPASingle Euro Payments AreaNext business day; seconds with SCT InstNo scheme limitEuro payments

Payment flow in SAP

  1. Payment run

    Proposal, review and run for open items.

    • F110
  2. Payment medium

    The Payment Medium Workbench writes the bank file.

    • GB_BACS
  3. Send to the bank

    Through Bacstel-IP, a Bacs bureau or the bank’s channel.

    • Bacs file
  4. Bank statement

    The bank returns the account statement.

    • CAMT.053
    • MT940
  5. Import and reconcile

    Import the statement and clear the open items.

    • FF_5
    • FEBAN

Payment medium format

GB_BACS

Domestic supplier and employee payments, with the standard Bacs header, data and trailer records. Supports daily files, multi-day files, multi-file (bureau) submissions and alternative user numbers. If your Bacs software cannot read it, copy the format tree and adapt it.

GB_BACSBOX and GB_BACWAY are obsolete. Use GB_BACS.

Bank statements

CAMT.053.001.02
ISO 20022 statement, version 2
MT940
SWIFT customer statement

Fiscal year

Three different years meet in a UK project. Only the company’s own accounting year decides the SAP fiscal year variant.

Year 1 → Year 2JanFebMarAprMayJunJulAugSepOctNovDecJanFebMarAprSAP K4 · calendar year1 Jan – 31 Dec · 12 + 4 special periodsSAP V3 · April to March1 Apr – 31 Mar · 12 + 4 special periodsCorporation tax financial year1 Apr – 31 Mar · sets the tax ratesPersonal tax year6 Apr – 5 Apr · income tax, PAYE, Self Assessment

The company’s accounting year can end in any month; many UK companies use 31 December or 31 March. Corporation tax is paid on that accounting period, and when it straddles 1 April the profit is split between two financial years.

The 6 April tax year applies to individuals: income tax, payroll (PAYE) and Self Assessment. It does not set a company’s fiscal year.

  • Choosing the variant

    K4 fits most UK company codes and keeps them aligned with a calendar-year group. V3, or a Z variant, fits companies whose year ends on 31 March.

    Take the variant from the company’s accounting year, agreed with the business — not from the tax year.

  • Configuration

    OB29
    Define the fiscal year variant
    OB37
    Assign the company code to it
    OBY6
    Check the company code’s global data

    Screens and paths can differ by release; these are from SAP S/4HANA.

  • Will the tax year change?

    In September 2021 the Office of Tax Simplification studied moving the year end to 31 March or 31 December. It found clear benefits but high transition costs, and recommended no change. The office itself was abolished in 2023.

Withholding tax: Construction Industry Scheme

Most UK supplier payments carry no withholding tax. The case SAP handles is the Construction Industry Scheme (CIS): a contractor deducts tax from payments to construction subcontractors and pays it to HMRC. Always confirm the company’s position with its tax team.

  • 0%

    Gross payment status

    Paid without deduction (exemption reason GP).

  • 20%

    Registered for CIS

    Subcontractor registered and verified with HMRC.

  • 30%

    Not registered

    Subcontractor not registered or not verified.

Labour only: the deduction applies to the labour part of the invoice, not to materials or VAT. Split the invoice lines or adjust the withholding tax base.

Monthly return (CIS300): the tax month runs from the 6th to the 5th, and the return is due by the 19th. In SAP it is the DRC report GB_WHT_CIS300.

Configuration, step by step

  1. Check withholding tax countries/regions

    Adjust the country/region IDs if needed.

  2. Define reasons for exemption

    For example GP, gross payment status.

  3. Define withholding tax types for payment posting

    Type 01, Construction Industry Scheme.

  4. Define withholding tax codes

    Rates and exemptions, for example code 20 at 20%.

  5. Assign types to the company code

    Withholding tax agent, obligated from and until.

  6. Activate extended withholding tax

    For each new company code.

  7. Determine accounts for withholding tax

    G/L accounts for every withholding tax posting.

Example: type 01 · CIS

Base amount
Net amount
Rounding
Commercial
Cash discount
Before withholding tax
Post withholding tax
Yes
Accumulation
None
Manual entry
Allowed
Min./max. amounts
At code level
Minimum check
Item level

Example: code 20 · registered subcontractor

Percentage subject to tax
100%
Withholding tax rate
20%
Posting indicator
1
Official key, income type
Blank

Posting indicator

1
Deducted from the supplier or bank line; the withholding tax line is created automatically.
2
Grossing up: two opposite withholding tax lines, amount × 1/(1 − rate).
3
Two opposite withholding tax lines.

Statutory reporting with DRC

SAP Document and Reporting Compliance (DRC) produces the UK statutory reports in the Run Statutory Reports app, under the reporting entity GBGRPENTY. Electronic submission through DRC is optional.

  • VAT Return

    Sent to HMRC

    The VAT return under Making Tax Digital, sent to the MTD API.

    • GB_VAT_DCL
    • JSON

  • CIS monthly return

    Sent to HMRC

    From cleared supplier invoices and credit memos and open down payments. Extended withholding tax only.

    • GB_WHT_CIS300
    • XML
    • PDF

  • EC Sales List

    Sent to HMRC

    Only for goods sold from Northern Ireland to EU VAT-registered customers. Great Britain stopped in 2021.

    • XI

  • Reverse Charge Sales List

    Sent to HMRC

    Sales of specified goods, such as mobile phones and computer chips, under the domestic reverse charge.

  • HMRC Audit Files

    Kept in house

    Sales, materials and finance files for HMRC’s off-site VAT checks, on request.

    • GB_HMRC
    • TXT

  • Payment Practices and Performance

    Kept in house

    Invoices paid late, average days to pay and interest, for the statutory payment report.

    • GB_PPPR
    • ALV
Features by report
FeatureWithholding taxEC Sales ListVAT ReturnReverse chargeAudit filesPayment practices
Manual adjustment
Data preview
Electronic submission
Correction phases
Manage tax items
Post tax payable
Embedded analytics

Running a report

  1. Pick the report

    Reporting period and report name, for example GB_WHT_CIS300.

  2. Filter the tasks

    Status, submission due date, year or country/region.

  3. Choose Go

    The app lists the reporting tasks per period.

  4. New Run

    Company code and posting date; run now, later or in the background.

  5. Run and submit

    Check the preview, then submit to HMRC.

Accepted: the task closes; later changes go through the correction phase.

Rejected: fix the data, regenerate in the same task and submit again.

Reporting entity parameters · GBGRPENTY
ParameterValue
GB_ADDRESSTaxpayer’s address[Registered address]
GB_COMPANY_NAMETaxpayer’s company name[Company name]
GB_SENDERIDSender ID[Gateway sender ID]
GB_URI_VENDORIDGateway ID of the sending application[Vendor ID]
GB_VAT_VATREGNOTaxpayer’s VAT number[VAT number]

References