Making Tax Digital A Practical Guide for Our Customers
Last Updated – 18/10/18
As you will probably know, the new Making Tax Digital (MTD) legislation will come into play from April 2019 for all businesses with a turnover above the VAT threshold of £85,000. This will require them to submit their VAT return to the HMRC through software which is Making Tax Digital compliant.
If the subject of Making Tax Digital is still new to you then we would suggest that you read our blog post on it before continuing to read on. It can be found here: Get Ahead Of MTD.
Firstly, it’s important to understand just how important this is. Although there have been some rumblings about MTD legislation being delayed, or not even happening, the chances of this are incredibly slim. It is happening, and it will affect virtually every business in the UK. Failure to submit your VAT return in the correct way will result in fines and ultimately a winding up order, so it just can’t be ignored.
In order to be compliant you will need to be on the latest version of your software, so unless this has been installed recently you’re likely to need a software upgrade. Once this upgrade has been done the MTD upgrade will need to be installed when it becomes available (for some software packages this could be as late as February 2019). It’s vital that you understand that this could be a two-step process – firstly upgrade your software version and secondly install the MTD update.
Software version upgrades can be fairly significant, especially if you have bespoke changes to your package or bespoke reports. In some cases you may even need to upgrade your server or network infrastructure for the software upgrade.
The MTD update is likely to be a lot more straight forward. Until we have seen exactly what the software upgrade entails, we can’t be 100% sure on the timescales, but we aren’t expecting any nasty surprises at this stage.
We are strongly advising that all businesses plan their upgrades as soon as possible. Making Tax Digital adds to an already very busy time for software companies like ourselves due to the normal Payroll software upgrades we always carry out at this time of year. We are expecting it to be an incredibly busy time so advise that you book in your upgrades as soon as you can so that you are fully prepared.
So, in summary here are the key things to consider
Making Tax Digital is not an option, every business above the VAT threshold must do it.
Update Your Software
Your accounts/finance/business software needs to be on the latest version available.
A software version upgrade can involve bespoke rewriting and hardware upgrades so it needs to be planned well in advance.
The Quicker The Better
We strongly advise businesses to upgrade their software versions before the end of 2018 so that the more straight forward MTD update can be booked in ahead of April 2019.
What Do I Do Next?
For more information, to discuss your software upgrade or book in the MTD module update please contact us:
Exchequer have 2 modules available or MTD – Base and Full Editions. The functionality of the Base version will fit for 90% of users as will allow adjustments and grouped returns. There are some slight benefits of the Full edition over the Base in terms of assistance with reconciling and authorising VAT submissions. At the time of writing, the Base edition has just been released and is in Beta testing at the moment.
Ensure you have your Authorise Government Gateway Username and Password
We advise that the MTD complaint version for Exchequer are V12 which has a seamless integration with the MTD modules, or V2018R1.1 which will require some manual intervention within the excel output. Please see below Guide to the Exchequer MTD Module – Base Edition
If you would like further information on the Upgrade system requirements and Pricing, please contact your account manager of email email@example.com
A video on the full MTD process will be released shortly.
Ensure you have your Authorise Government Gateway Username and Password
If you need to upgrade to the latest version of Exchequer we strongly advise that this upgrade is booked as soon as possible. In some cases this may be a significant upgrade requiring bespoke rewriting and hardware changes and therefore will need to be completed before your MTD update is applied.
We recommend that, if you are not already, you begin the process of understanding Exchequer’s current functionality of VAT 100 submissions as we envisage this will be a core component of MTD.
For further detail on functionality and costs of these Submission Modules, please speak with your account Manager or contact us via firstname.lastname@example.org
It was announced some time ago that no further updates would be released for Pegasus Opera II which means that the software will not be compatible with MTD. Here’s the information we know.
No Making Tax Digital update will be available for Pegasus Opera II so it will not be compliant with the HMRC’s requirements for VAT submissions
We strongly advise business to upgrade to Pegasus Opera 3 which will enable them to have the MTD upgrade applied in time for April 2019.
An upgrade from Pegasus Opera II to Pegasus Opera 3 can be significant with bespoke rewrites and hardware changes potentially required
We advise that you contact us to discuss upgrading to Opera 3 as soon as possible to be prepared for the MTD legislation changes
If you need to upgrade to Pegasus Opera 3 we strongly advise that this upgrade is booked as soon as possible. In some cases this may be a significant upgrade requiring bespoke rewriting and hardware changes and therefore will need to be completed before your MTD update is applied.
For more information or to discuss your upgrade from Pegasus Opera II to Pegasus Opera 3 contact us:
For Pegasus Capital Gold user the information we have about Making Tax Digital is as follows.
An MTD update will be available and is expected to be available in early 2019
Details of the module’s functionality at this stage are unknown (i.e. how it will deal with partial exemptions and any external VAT sources)
The costs of the MTD update are unknown at this stage and you will need to book in the upgrade with our Pegasus support team when the upgrade is available. The upgrade is chargeable and expected early 2019. We will be in touch to notify you of its release.
Here’s a video outlining MTD in general in Pegasus Capital Gold.
For more information or to book in the MTD module update please contact us:
Pegasus have now released version 2.60 which is the Making Tax Digital Compliant version. This is a version which requires a full system upgrade of Opera3 and Scheduler in order to complete the required changes.
There is no external Module, the changes are within the core functionality and uses the Pegasus Scheduler for the submissions to the HMRC.
Full details of the Product Guide and MTD Checklist can be found below.
The charge for the full system upgrade is £285.00 and Our support desks are open to schedule upgrade and advise on any queries 01724 400301 or email email@example.com
Your IT Systems will need to support Microsoft .Net Framework 4.7.2 on both the Server and Client Machines in order run the upgraded version. Full System requirements can be found below.
Here’s a video outlining the MTD process in Opera 3
We recommend that, if you are not already, you begin the process of understanding Opera 3’s current functionality of VAT 100 submissions as there is a requirement to submit all non-committed Vat prior to starting the MTD process. This is fully documented in the attached guides and will also be covered as part of the Video. We also recommend taking the time to read through our guides in order to understand your HMRC requirements for Registration and Authorisation.
For Sage 50 users to be prepared for Making Tax Digital we have compiled the information we currently know below.
You will need to be on the latest version of Sage 50 Cloud (Sage 50c v25) which we recommend for the full MTD functionality
Full details on the Key Steps and Guides can be found below.
The MTD solution is integrated into the Sage 50c program, Charged for assistance do Vary dependant of current version. Please contact your Account Manager for further Guidance or email firstname.lastname@example.org
Here’s a video outlining the MTD process in Sage 50 with Sage MTD Submissions Module
We recommend that, if you are not already, you begin the process of understanding Sage 50’s current functionality of VAT 100 submissions as we envisage this will be a core component of MTD.
For Sage 200 users a good amount of information has been released about Making Tax Digital and below in the guidance we can provide.
You will need to be on the latest version of Sage 200 (Sage 200c 2017.02 Spring Edition) – please remember that software version upgrades can be significant and may require bespoke rewrites and hardware changes
If you decide not to upgrade a Making Tax Digital Module has also been released and is available to buy. This currently costs up to £3,000 (depending on your software version) but is expected to rise in price as we get closer to April 2019
The module, which also allows for Group VAT/multi company submissions, and will provided free of charge for any Sage 200 customers on the latest version if required
If a Sage 200 customers decides not to upgrade to the latest version and not buy the MTD module then Sage will add an additional £1,800 MTD service charge per year for using an un-support solution from a third party. Without upgrading, the only way to avoid this is to request an exception which can be submitted via HBP (i.e. if you are under the VAT threshold, are a charity or feel you have another reason for exemption)
The Sage MTD module will come with a free eLearning course (valued at £200) which will be provided via the Sage University website.
Once you have either upgraded to the latest software version or purchased the MTD module will need to book in the MTD upgrade with our Sage support team which will be a chargeable upgrade
Here’s a video outlining the MTD process in Sage 200 with Sage MTD Submissions Module
If you need to upgrade to the latest version of Sage 200 we strongly advise that this upgrade is booked as soon as possible. In some cases this may be a significant upgrade requiring bespoke rewriting and hardware changes and therefore will need to be completed before your MTD update is applied.
We recommend that, if you are not already, you begin the process of understanding Sage 200’s current functionality of VAT 100 submissions and we envisage this will be a core component of MTD.
General Advice from Sage
Sage have released the following guide, targeted at helping any business prepare and transition to new processes under MTD.
A guide to getting ready for MTD and making VAT submissions, featuring advice from Peter Jones.