Navigating UK GDPR vs EU GDPR in 2026: What Dynamics 365 Business Central Users Need to Know

Data protection isn’t standing still post-Brexit. As we enter 2026, the UK GDPR and the EU GDPR are evolving, creating new compliance challenges for organizations operating across borders. For Dynamics 365 Business Central (BC) customers, this means ensuring ERP environments remain aligned to shifting obligations on data privacy, cross-border transfers, and regulatory enforcement.

At YASH Technologies, we help UK and European businesses confidently navigate this complex landscape — aligning Business Central implementations with compliance and business agility.

Why GDPR Still Matters in 2026 (Especially for BC Users)

Even in 2026, GDPR (and its UK counterpart) is not just about ticking a compliance box—it remains a critical trust differentiator, as customers increasingly expect data protection to be seamlessly built into business systems. Dynamics 365 Business Central, a core ERP platform for finance and operations, inherently handles a broad spectrum of personal data, from employee records and customer master data to vendor contacts and usage logs. How this data is collected, processed, stored, archived, and transferred must continue to align with evolving regulatory regimes.

While Microsoft provides robust compliance-enabling features within Business Central, such as audit logs, field-level security, data classification, and built-in support for responding to Data Subject Requests, the system cannot ensure compliance in isolation. The fundamental responsibility lies in how organizations configure the platform, build extensions, design processes, and enforce governance policies. For Business Central customers, this means staying vigilant to regulatory divergences, monitoring cross-border data transfer mechanisms, and anticipating enforcement trends likely to evolve further in the years ahead.

Post-Brexit Divergence: UK GDPR vs EU GDPR in 2026

After Brexit, the UK “copied and pasted” the EU GDPR into domestic law, creating the UK GDPR, which mirrors the EU GDPR in many respects (principles, rights, lawful bases, accountability) ^[1]. That alignment was intentional—to minimize disruption.

However, several differentiators and emerging reforms have created a gap. Key areas to watch:
 
Supervisory authorities & enforcement practices

• In the EU, enforcement is decentralized via national Data Protection Authorities (DPAs) coordinated under the European Data Protection Board (EDPB).
• In the UK, the Information Commissioner’s Office (ICO) oversees UK GDPR enforcement, policy guidance, and investigations.
• The ICO may adopt more pragmatic or innovation-friendly stances compared to stricter interpretations by some EU DPAs.
• Over time, differences in guidance (for example, on pseudonymization, anonymization, consent) could widen.

Reform initiatives in the UK

• The UK’s Data (Use and Access) Act, which received Royal Assent in June 2025, introduces changes to the UK’s data access regime and may shift how UK GDPR is interpreted (e.g., greater flexibility in specific data use scenarios) ^[2]
• The UK government has signalled its intent to simplify burdens on business, especially SMEs, potentially easing obligations like DPIAs, data protection officers, or backup mechanisms. The UK is also considering how retained EU law reforms (i.e., those GDPR rules inherited from EU law) might be amended over time to “unlock innovation.”

EU GDPR Reforms

• In parallel, the EU has launched a “Fourth Omnibus” package (May 2025) with proposals to simplify certain obligations, reduce burdens on businesses, modernize rules around cookies/tracking, improve clarity on data transfers, and streamline compliance processes.
• These reforms may shift EU expectations, leading to new divergences between UK and EU regimes.

In short, while the UK GDPR and EU GDPR remain aligned mainly in 2026, they are on subtly diverging paths, forcing dual compliance vigilance for cross-jurisdictional operations.

Data Transfer Challenges & Adequacy Risks

One of the most pressing challenges for Business Central users in 2026 is cross-border data flows between the UK and the EU. While the EU granted the UK an adequacy decision in 2021—allowing data to move freely without additional safeguards—this approval is subject to ongoing review. With the European Commission extending adequacy until December 2025 to scrutinize the UK’s new Data (Use and Access) Act, organizations face a real risk that adequacy could be narrowed or revoked. Should that happen, businesses must pivot quickly to alternative mechanisms such as Standard Contractual Clauses (SCCs), Binding Corporate Rules (BCRs), or other transfer safeguards to maintain lawful EU–UK flows. Meanwhile, the UK permits free transfers to the EU but requires safeguards for different jurisdictions. For Business Central customers, integrations, reporting, backups, and shared services spanning UK–EU boundaries must be architected with resilience, baking in robust, future-proof transfer controls to avoid costly disruptions.

Operational Impacts for Business Central Customers

• UK-based businesses must comply with UK GDPR locally and EU GDPR when handling EU customer data — effectively dual compliance.
• EU-based businesses: Must primarily comply with EU GDPR, while ensuring UK-specific obligations are met for UK data subjects.
• Multinationals: Hybrid BC environments spanning the UK and EU must partition, monitor, and audit data flows regionally while preparing for “dual breach reporting” and dual DSAR handling.

 
Simply put: the compliance burden has doubled. Organizations risk exposure without transparent data partitioning, consent records, and deletion workflows in BC.

Best Practices & Recommendations for BC Users in 2026

How YASH Technologies Empowers Compliance

As a Microsoft Solutions Partner for Business Applications, YASH brings technical depth in Business Central and regulatory expertise in GDPR compliance.

We support organizations through:

• GDPR-Focused Assessments — Evaluating current BC configurations, integrations, and data handling for compliance gaps.
• Custom Implementation & Extensions — Embedding privacy-by-design features such as consent tracking, anonymization, and data partitioning.
• Continuous Compliance Monitoring — Leveraging dashboards, alerts, and automated audits to detect and address compliance drift.
• Client Enablement & Training — Equipping teams with the knowledge, playbooks, and readiness to handle DSARs, breaches, and audits.

 
Our role goes beyond ERP implementation. We act as a trusted advisor, ensuring Business Central environments are resilient against today’s rules and tomorrow’s changes. To know more, contact us at info@yash.com

• GDPR 2026
• UK GDPR