For UK businesses using Microsoft Dynamics 365 Business Central, localisation has always been a key consideration. Localisation ensures that the system meets country-specific requirements such as VAT, Making Tax Digital (MTD) and statutory reporting. Historically, these features were embedded in the core application, but Microsoft has shifted UK localisation into extensions. This change, known as delocalisation, has important implications for implementation and upgrades.
In this blog, we’ll explain what delocalisation means, why Microsoft made the change, and how it benefits multi-entity UK businesses. We’ll also share simple examples to illustrate the practical impact.
What is delocalisation?
Delocalisation refers to the process of moving country-specific functionality out of the base Business Central application and into separate extensions. For the UK, this includes features such as VAT reporting, MTD integration and CIS (Construction Industry Scheme) compliance. These extensions are published and maintained by Microsoft, ensuring they remain aligned with regulatory changes.
Previously, localisation was hard-coded into the application. This made upgrades more complex because any changes to local features could affect the core system. By moving localisation into extensions, Microsoft has decoupled these features from the main application, making updates faster and less disruptive.
Why Microsoft made the change
The shift to extensions is part of Microsoft’s broader strategy to simplify upgrades and support global consistency. According to Microsoft, “Extensions allow customers to stay current with less effort, reducing the cost and complexity of updates.” For UK businesses, this means localisation no longer slows down the adoption of new versions or features.
Gartner notes that ERP systems with modular localisation achieve up to 40% faster upgrade cycles compared to monolithic systems. This is critical for businesses that want to take advantage of new capabilities like Copilot AI or advanced analytics without waiting for localisation updates.
Benefits for multi-entity UK businesses
Delocalisation offers several practical benefits, especially for organisations operating multiple entities or subsidiaries in the UK:
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Simpler upgrades: Because localisation is now an extension, upgrades to the core Business Central application are less likely to be delayed by country-specific changes. This reduces downtime and keeps systems current.
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Consistent compliance: Extensions maintained by Microsoft ensure that VAT, MTD and CIS features are always up to date with HMRC requirements. Businesses no longer need to worry about custom code breaking during upgrades.
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Flexibility for multi-entity setups: Each UK entity can enable the localisation extension independently. This is useful for groups with mixed operations, such as one entity needing CIS compliance while another does not.
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Reduced customisation risk: Extensions are designed to work alongside other apps without modifying the base code. This lowers the risk of conflicts during upgrades and simplifies support.
Simple examples of delocalisation in action
Here are two practical scenarios that show how delocalisation benefits UK businesses:
Example 1: VAT and MTD compliance
A UK retail group with three entities upgrades to the latest Business Central release. Previously, the upgrade would require testing embedded VAT and MTD features in the core system. Now, these features are in a Microsoft extension, which updates automatically. The group completes the upgrade in days rather than weeks, with no disruption to VAT submissions.
Example 2: CIS for construction projects
A construction SME uses Business Central for project accounting and CIS compliance. Under the old model, CIS functionality was part of the base application, making upgrades risky. With delocalisation, CIS is an extension that updates independently. The SME can adopt new features like improved WIP reporting without worrying about CIS breaking during the upgrade.
What this means for implementation
For new implementations, delocalisation simplifies the process. Partners can deploy the UK localisation extension alongside the core application without complex customisation. This reduces project timelines and costs. It also means businesses can start with a standard UK setup and add industry-specific extensions later, such as CIS for construction or advanced VAT reporting for retail.
For existing customers, the key takeaway is that upgrades will be smoother. Extensions update automatically through AppSource, so businesses can stay compliant without manual intervention. This aligns with Microsoft’s “evergreen ERP” vision, where systems remain current without major upgrade projects.
The bottom line: faster upgrades, stronger compliance
Delocalisation is a positive change for UK businesses using Business Central. By moving localisation into extensions, Microsoft has reduced upgrade complexity, improved compliance and increased flexibility for multi-entity organisations. For finance teams and IT leaders, this means less time spent on maintenance and more time focusing on growth.
As Microsoft states, “Extensions are the foundation of a modern, adaptable ERP.” For UK businesses, this translates into a system that is easier to maintain, quicker to upgrade and always ready for regulatory changes.
Ready to take advantage of UK localisation extensions?
If you’re planning an upgrade or new implementation, now is the time to explore how Business Central’s UK localisation extensions can simplify compliance and accelerate deployment. Speak to your Microsoft partner to ensure your system is configured for the future.