This article was updated on 21 June to reflect recent announcements from Sage.
With the advent of MTD swiftly approaching there is some preparation that can be completed now to avoid a last minute panic.
If you currently use Sage 50 Accounts, then you will be pleased to learn that Sage have officially announced that their desktop product will be MTD compliant in time for the April deadline next year.
Whilst this is indeed welcome news, having delved deeper into the Sage Accounts MTD requirements there is still some planning needed to confirm readiness for MTD.
Sage are designing the MTD module to be distributed by way of a legislation update (much like the payroll software), but it will only be available to businesses using a recent version of Sage 50 Accounts. This first hurdle is the most important to check, because unlike Sage Payroll that has a compulsory update each year, many businesses have enjoyed a perpetual licence for their Sage Accounts software and as such have not needed to update their software for continued use. In fact, I’m still seeing ‘vintage’ versions of Sage Accounts in use (some more than fifteen years old!).
Sage have designed a MTD add-on module to accommodate businesses using older versions of Sage Accounts, however despite initially suggesting that this would be a free update available with the newest version (V24), it will now be chargeable on all compatible versions with prices indicated to start from £350 annually.
In view of this, there will be a considerable number of affected businesses that will need to review and update their Sage Accounts software accordingly to guarantee MTD compliance.
If you fall into this category, then there are further considerations due to the different methods to purchase a software licence from Sage. The monthly/annual ‘subscription’ licence, or traditional ‘perpetual’ licence.
Given Sage’s recent U-turn to the MTD module charges, this is clearly driving businesses towards the subscription licence which will include the MTD module at no extra cost.
The subscription licence is paid monthly (although annual options are available) and is a continual payment. This option will include technical support and automatic upgrades to new versions. It should be noted that if the subscription is cancelled, then access to the software is lost, along with access to historical accounting data.
The traditional perpetual licence is still offered via Sage Accountant Partners and is a ‘one-off’ payment. This option will include technical support and automatic upgrades in the first year, but is optional thereafter. You will not lose access to the software if you chose not to renew the support in the second year.
There is a third option that may be of interest if you are considering an online ‘cloud’ accounting solution. It’s hard to ignore the growing number of competitors in the cloud accounting sector (Quickbooks Online, Xero etc.) . These are paid by monthly subscription, include technical support, MTD compliance and have the added benefit of online access.
It would be advisable to explore all of the above options to ensure that you are getting the most cost effective solution and one that suits your business needs. Please contact your local Thomas Westcott office if you need assistance with the upgrade process.
By IT & Accounts Specialist, Robin Marchant
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