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Opera II will not be compliant with Making Tax Digital

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Making-Tax-Digital-HMRCMaking Tax Digital (MTD) is the new government programme that comes into force in April 2019. It will require ALL VAT registered businesses with a turnover above £85,000 to compile and submit their VAT returns online through their accounting software.

Opera II customers should be aware that Pegasus have confirmed they are not planning to release an MTD update for Opera II. This means that Opera II will not be compliant with Making Tax Digital. Anyone still using Opera 2, who is required to adhere to MTD, will need to take action.

It is also worth considering that Opera II payroll will not be updated in 2019. If you wish to continue using payroll next year, you will need to upgrade your software.

We strongly recommend speaking to your Account Manager now to discuss upgrading your software. In essence, this presents you with two options:

Option 1 – Upgrade to Opera 3: 

Upgrading to Opera 3 offers the advantages of minimal disruption to your business, data migration that is quick and easy, and little retraining for your staff. You can also choose to purchase the software on a subscription model if required. Read the Benefits of Upgrading to Pegasus Opera 3 to find out more.

HMRC has officially listed Pegasus as a software supplier with VAT compatible products in development. Pegasus will be implementing the necessary changes for MTD in an updated version of Opera 3. This will be called Opera 3 v2.60.00 and is scheduled for release at the end of January 2019. It will apply to all versions of Opera 3 and will include the statutory Payroll changes for 2019/20.

For more information, read our guide on the Functional Changes to Opera 3 for MTD Compliance.

Option 2 – Upgrade to another Cloud-based accounting solution:

Upgrading to a Cloud-based accounting solution, such as Dynamics 365, has its advantages. The benefits of a Cloud accounting software are well documented. In essence, your software is accessible anytime, anywhere, does not require a server and is platform independent. In addition, you will be future proofing your business. PCR can help advise and implement alternative software.

Making Tax Digital Timings

Businesses will need to comply with MTD for their first FULL VAT period starting on or after 1 April 2019. A ‘VAT period’ is the inclusive dates covered by a VAT Return. Below are a couple of examples to illustrate this:

  • Example 1: A business submits a quarterly return, and their next return covers the period 1 March to 31 May 2019. As the whole of the VAT period is not on or after 1 April 2019, the business will need to start complying with MTD from 1 June 2019. The VAT return for the period 1 March 2019 to 31 May 2019 will be submitted using Online Filing Manager or HMRC online portal.
  • Example 2: A business submits a quarterly return, and their next return covers the period 1 April to 30 June 2019. As the whole of the VAT period is on or after 1 April 2019, the business will need to start complying with MTD from 1 April 2019.

The MTD deadline is fast approaching. We therefore strongly recommend getting in touch as early as possible to discuss your requirements and schedule your upgrade. Making Tax Digital adds to an already busy period with Payroll software upgrades undertaken at this time of year.


 

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