Merry Christmas from all the team at Optimise.

Our helpdesk is open over the Christmas period as follows:

Mon 23rd December – Emergency Service*
Tue 24th December – CLOSED
Wed 25th December – CLOSED
Thu 26th December – CLOSED
Fri 27th December – Emergency Service*
Sat 28th December – CLOSED
Sun 29th December – CLOSED
Mon 30th December – Emergency Service*
Tue 31st December – Emergency Service*
Wed 1st January – CLOSED
Thu 2nd January – CLOSED
Fri 3rd January Onwards – Open as usual

* During Emergency Service days, log a support ticket by emailing the following addresses:

For SOFTWARE support: software@optimisesupport.co.uk
For WEBSITE support: web@optimisesupport.co.uk

We would like to take this opportunity to thank you for your valued custom.
We wish you a Merry Christmas and a very successful 2025.

Background

From 1st January 2021 HMRC have changed the specification of Making Tax Digital Submissions with regard to imports from outside the UK.

The system update 901 described in our previous blog on Postponed VAT changes needs to be run before you make any Making Tax Digital VAT submissions that include January 2021 onwards otherwise your VAT submission may not be compliant, whether you postpone Import VAT or not. If you have not run it yet, high level access users will see a red “Alert” shown at the top of the Optimise menu.

Up to the end of December 2020, if you used the “EC Purchase” VAT Code then the VAT Return Calculation (Snapshot 38) would add the purchase value to box 7 then calculate 20% on the invoices with that code and add that figure to boxes 2 and 4 on the VAT Return.

For goods received from January 2021, you should no longer use the “EC Purchase” VAT Code but instead be using the new “IM” (import) code. This will still add the purchase value to box 7 but no longer affect boxes 2 and 4 on the VAT Return.

However HMRC still want you to record on the VAT Return (in boxes 1 and 4) the amount of Import VAT your imports incurred during that quarter on imports from 1st January 2021. This figure should not be deduced or calculated yourself, but instead HMRC want you to take this from Postponed Import VAT Statements for your EORI number which you can download monthly from HMRC.

It’s easy to get set up to get postponed import VAT statements and you only have to do this once:-

1. On your web browser, go to https://www.gov.uk/guidance/get-your-postponed-import-vat-statement
2. Click “START NOW“. You need to enter your VAT Return credentials then other company info that you should know.
3. Eventually you will get to the following screen (bookmark it): https://www.tax.service.gov.uk/customs/payment-records/postponed-vat
4. This should show if you have any monthly statements. You can download the statements from here.

New procedure you need to adopt

1. Before submitting each VAT Return, you need to have downloaded the Postponed Import VAT Statements for the three months covered by the VAT quarter. They are available to download shortly after each month has ended so you don’t have to wait until the end of the VAT quarter. Use the second URL above to get them (login with your VAT return credentials), i.e. https://www.tax.service.gov.uk/customs/payment-records/postponed-vat
2. You should file these statements safely in the same way as you would any other VAT-related documents, such as the VAT report.
3. You only need the total Import VAT figure shown at the end of the Statements.
4. Post a nominal recurring journal (the code is “ImportVAT”) for either the sum of the 3 Import VAT Statements or post 3 journals, one per month. (The journal is a 2-way journal between Sales VAT and Purchase VAT for the amount of Import VAT that has been postponed during each month. This journal will land on boxes 1 and 4 of your VAT Return).

If you have any queries please contact our helpdesk.

The standard rate of VAT in Ireland increases back from 21% to 23% for all invoices raised on or after the 1st of March 2021.

As some tasks can be take some time to do manually, we have written a program to automate these steps which is available to purchase if required (contact our helpdesk). The steps that can be automated with this program are shown marked with ***.

Some tasks listed are optional (marked @@@). If you wish to carry out any of these optional items, we have additional programs available to automate these tasks, available to purchase from our helpdesk if required.

The steps you should go through for this VAT rate change are as follows:-

(A) After entering all sales orders for the period up to the end of February 2021 and after running the Sales and Product Month End Update procedure:-

1. Change the default sales VAT code for each product group that is currently at 21% to the 23% VAT code. This can be done using the EDIT program in the Products – Utilities – Product Groups section. ***
2. Change the VAT rate on live sales orders. You should change the VAT rate associated with all live sales order lines so that when the invoice is raised the new VAT rate will be used. Note: for RETAIL order lines, the selling price to the customer will stay the same – it will be your margins that will change. ***
3. Change quote line VAT rates (ONLY APPLIES IF YOU USE THE QUOTES MODULE). You should change the VAT rate associated with outstanding sales quote lines so that when they are turned to firm orders the new VAT rate will be used. Note: for RETAIL quote lines, the selling price to the customer will stay the same – it will be your margins that will change. ***
4. (OPTIONAL) Invoice sales deposits paid against live orders in February at the old VAT rate. ONLY APPLICABLE TO RETAILERS WHO WANT TO INVOICE ALL DEPOSITS IN FEBRUARY AT THE OLD VAT RATE. You should add a “deposit” item at the old VAT rate to each live sales order for the value of deposit paid, invoice them as February and reduce the order value of lines still in progress by the deposit amount. @@@
5. (OPTIONAL) Invoice all live sales orders in February at the old rate. ONLY APPLIES TO RETAILERS WHO WANT TO INVOICE ALL SALES ORDERS NOW AT THE OLD VAT RATE. You should add a “whole order” item at the old vat rate to each live sales order for the full order value, invoice them as February and reduce the order value of all sales order lines to zero. @@@
6. (OPTIONAL) Increase live sales order values by the difference between the old and new VAT rates. ONLY APPLIES TO RETAILERS WHO WANT TO INCREASE THE SELLING PRICE OF LIVE ORDERS. You should change the “including VAT” selling price on existing live sales orders up slightly. Most people will not wish to do this. @@@

(B) Change the default VAT code associated with each supplier whose VAT code is 21% to 23%. This should be done when the majority of purchase invoices to be entered into the system are for the new rate (likely to be in a couple of weeks) but can be done sooner. This can be done using the EDIT program in the Accounts – Supplier – Maintenance section. ***

(C) Change the default VAT rate associated with Nominal Ledger accounts. You should change the default VAT rate associated with your nominal ledger accounts that are currently at the old VAT rate to the new VAT rate. This should be run when the majority of nominal ledger postings to be entered into the system are for the new VAT rate (likely to be in a couple of weeks). This can be done using the EDIT program in the Accounts – Nominal – Maintenance section.  ***

________________________________________________________________

If you have any queries about this VAT change, please email software@optimisesupport.co.uk or call our helpdesk.

For imports into the UK from outside of the UK from 1st January 2021 you need to use new VAT code “IM” and for imports into Northern Ireland from outside of the UK from 1st January 2021 you need to use new VAT code “IMNI”. There are also some minor changes to how the figures in the various boxes on your VAT submission are calculated.

We have written a system update snapshot to update your Optimise system, set up the new VAT codes and change any transactions from 1st January posted with the old “EC Purchases” code to the new VAT code.

We will be rolling it out to all of our affected clients in the next couple of days.

When the system update has been installed and is ready to run on your system you will see a red “Alert” at the top of the Optimise program menu.

When you click on the alert you will be advised to run the system update snapshot.

You should run the system update as soon as you can and before your next MTD VAT submission.

The system update only affects the database you are logged into. If you have more than one live database, then the update needs to be run on each one. You do not need to run it on a test database unless you regularly use it. This update is not required for databases outside the UK (if run it will not make any changes).

These are the steps to install the system update:-

1. First run Snapshot Id 257 and check suppliers set up as EC Purchases should remain as EC Purchases. Amend to UK VAT rate if not.
2. Ask other users to log out of Optimise until the system update is complete.
3. Click on the “Snapshots” option from the main menu.
4. Double-click the System Update snapshot (it will be the first in the list) and click “Create Spreadsheet”.
5. This will start the update which might take several minutes depending on the amount of data in your database.
6. The “Create Spreadsheet” will change to “Cancel” whilst the update is being run.
7. Please allow the update time to complete – do not cancel or click on Optimise – it should take no more than a few minutes ro run.
8. If you do click on Optimise whilst the update is running, you will get the message “Not Responding”. This does not mean that the update is stalled, it is still running so please leave the update to complete.
9. When complete, the “Cancel” button will be changed back to “Create Spreadsheet” and an Excel icon will be highlighted in your taskbar.
10. On completion, click on the Excel icon in your taskbar to open the spreadsheet which has a list of the updates carried out together with information on what has changed on the system.
11. It is important that you read the information provided as there are changes you need to adopt when operating the system.
12. There is no requirement to save the spreadsheet unless you wish to do so for your own records.
13. You should now log out and back into Optimise and other users can log back in.

If you have any queries please contact our helpdesk.

For information on complying with Making Tax Digital (MTD) see our Optimise Users – Complying with Making Tax Digital for VAT.

Pre-requisites to submitting your VAT Returns through the Optimise program:-

(1) You need to be running Optimise program version 4.9.41 or higher.

(2) You need to have submitted your last VAT Return in the usual way for the following VAT periods:-

• January to March 2019.
• February to April 2019.
• March to May 2019.

(3) Your “current” month in Optimise should be the last financial period in your next VAT quarter. I.e.

• If your VAT Quarter runs April to June then you should be in your June period.
• If your VAT Quarter runs May to July then you should be in your July period.
• If your VAT Quarter runs June to August then you should be in your August period

(4) You need to have registered with HMRC to submit you VAT Returns through software and you need to have received the confirmation email from HMRC that you can now do so. For information on registering for Making Tax Digital (MTD) see our Registering for Making Tax Digital.

(5) You should have already checked the Nominal VAT Report and the Snapshot 38 (VAT Form) figures match and that there are no erroneous entries in the report.

Submitting your VAT Return

For a comprehensive guide on submitting your VAT Return, see our Walk-Through Submitting Your VAT  Return from the Optimise program.

For information on complying with Making Tax Digital (MTD) see our Optimise Users – Complying with Making Tax Digital for VAT.

Before you can start to submit VAT Returns through the Optimise program you need to register with HMRC to do so.

Pre-requisites to registering:-

(1) You need to be running Optimise program version 4.9.41 or higher.

(2) You need to have submitted your last VAT Return in the usual way for the following VAT periods:-

• January to March 2019.
• February to April 2019.
• March to May 2019.

(3) Your “current” month in Optimise should be the last financial period in your next VAT quarter, i.e.

• If your VAT Quarter runs April to June then you should be in your June period.
• If your VAT Quarter runs May to July then you should be in your July period.
• If your VAT Quarter runs June to August then you should be in your August period

Registering

You can register at HMRC’s website.

Alternatively, you can register through the Optimise program by choosing Accounts – Nominal – HMRC VAT (MTD) – from the main menu. Note: This will take you to the same web page and is no different to above.

For comprehensive help on the registration process you can download our walk-through Registration help file.

Once you have registered there is a one to two day wait for HMRC to confirm by email that you can now submit your returns through the Optimise program.

For information on submitting your VAT Return, see our Submitting Your VAT Return from the Optimise program. This also contains a link to a walk-through help file.

For background information about Making Tax Digital (MTD) see our simple guide to Making Tax Digital for VAT.

If you hold some or all your VAT return information within the Optimise System, we have set out below what you need to do to comply with HMRC’s new Making Tax Digital (MTD) for VAT legislation.

Joining the HMRC Making Tax Digital Service

You will probably have received the letter below from HMRC. DO NOT join the service yet until you have everything ready as detailed below, otherwise you will be expected to submit returns digitally straight away.

Optimise Program Approval

MTD Links to the HMRC portal have been written into the Optimise program and our software is now recognised for HMRC’s MTD service. We will be rolling out the new MTD-ready version of Optimise shortly across our userbase. As you will not need to use the new MTD program until July 2019 at the earliest, there is plenty of time to get this new version installed.

Preparation for MTD

(1) Get your VAT information right in Optimise. HMRC require you to use figures direct from your software system. You need to be using the Optimise VAT Form snapshot figures unaltered to comply with HMRC’s MTD service.

(1a) If you currently use the VAT Form snapshot to submit your VAT online using the HMRC portal then you are already well prepared. Just keep doing what you do now and let our helpdesk know when your VAT quarters run so that we can schedule you to get the new Optimise MTD-ready version.

(1b) If you don’t currently use the VAT Form snapshot but are basing your VAT Return on the Optimise Nominal VAT Report then you need to check the new VAT Form snapshot to ensure it shows the same figures you have submitted for previously submitted VAT returns. If VAT Form figures do not match the Nominal VAT Report, contact our helpdesk as it is likely that there is simply some configuration of your system required. Again, just keep doing what you do now and let our helpdesk know when your VAT quarters run so that we can schedule you to get the new Optimise MTD-ready version.

(1c) If you currently use some information in the Optimise program but work out your final VAT Return “off-system”, for example in a spreadsheet, then you have some work to do. All your VAT information needs to be posted into the Optimise program in order to comply. If you contact our helpdesk, we can assess your current processes to determine what you have to do to comply and whether you might require either some training or a different version of Optimise. For example if you pay VAT on a cash accounting basis and you are not using the cash accounting version of the Optimise software. Alternatively, you could keep doing what you do now but use an approved MTD “bridging software” to submit your VAT return information from a spreadsheet. This option may not be available long-term but may be the best option if you are unable to make the necessary process adjustments quickly.

(2) Get the new (MTD-ready) Optimise version. We will be contacting you when the production version is ready. We will be providing help information on the MTD elements of the Optimise program. Important note: this version requires a minimum of SQL Server version 2012 for on-premise databases (Microsoft Azure cloud server is compatible). If running on an older version of SQL Server, contact our helpdesk for options.

(3) Check how MTD-ready your system is by running the Optimise VAT Checklist snapshot (Id 204).

(4) Join the HMRC Making Tax Digital Service. The Optimise MTD program will have a link to the HMRC website to do this. Important Note: Do not join the service until the end of your first VAT quarter that starts after 1st April. If your VAT quarter runs April-June then you do not need to join the service until July. If May-July then August. If June-August then September.  If you join before these dates then you will no longer be able to submit your VAT return by hand on the HMRC portal so make sure you have completed (1) and (2) above before joining.

To find out more about Optimise visit our website.

Given the questions many people have surrounding this we thought we should explain how it affects you and what you need to do about it.

Does it affect my business?

It affects all VAT Registered UK businesses with a taxable turnover above £85,000.

What exactly is it?

HMRC require VAT data to be digitally linked “end-to-end” which means that, once data has been entered into software used to keep and maintain digital records, any further transfer or modification of that data must be done using digital links (data cannot be rekeyed or manually cut and pasted) including submission of VAT returns electronically to HMRC.

Up to now, at each VAT quarter, you would normally calculate your VAT liability (or refund), log in to the HMRC VAT portal and key in your calculated figures into the 9 boxes required. The government want you to submit the figures directly via an Application Programming Interface (API) from your software system to their portal. They will only allow information to be sent from approved software systems.

When does it start?

July 2019 at the earliest. So don’t panic, there’s still plenty of time! You will not need to start sending information digitally until the end of the first VAT quarter that starts after 1st April 2019. That means the earliest will be July 2019 if your VAT quarter is April-June. If your VAT quarter is May-July then it will be August 2019 and if your VAT quarter is June-August then it will be September 2019. So, whilst the deadline seems close by, you still have at least 5 months from now to be ready.

If your company is part of a VAT group (if you fill in one VAT return covering more than one trading company), there is an option to defer by 6 months for MTD.

Do I need any special software?

You have two options:-

(1) Use a software system approved for MTD. This is the best option and the option preferred by HMRC.

If you don’t currently use a software system to calculate your VAT figures then you should start using one as soon as possible so that you can get used to the system before July. You need to ask your software provider if they plan on making the software compatible with MTD by July.

If you do use a software system to calculate some of your VAT figures but carry out some calculations “off-system” then you should bring your “off-system” calculations into your software system as soon as possible so that all VAT information is inside your software system (“digital”).

(2) Use “bridging” software (spreadsheet that incorporates MTD APIs). This option bridges the gap between digital systems that are unable to connect directly to HMRC and HMRC’s systems.

If you currently use a spreadsheet to calculate your VAT or your current accounting software provider does not link directly to HMRC (but can export VAT return information to CSV file) or you use an array of different software systems to calculate your VAT, you can use bridging software to send your VAT return information to HMRC.

Some bridging solutions are Excel plugins that can connect to HMRC’s systems. But most are simple software systems that allow CSV files to be imported.

What if my systems are not fully digital by July?

HMRC are relaxing the rules regarding digital linking to transaction records end-to-end until March 2020 (known as the “soft-landing” period) to help businesses get up to speed. You will require bridging software to submit VAT returns however you will be able to link any spreadsheet to bridging software for the first year. Alternatively, your accountant may offer a VAT return submission service if they have purchased bridging software.

To ensure you don’t miss any other important MTD notifications we recommend you subscribe to this blog (see option to the right).

Further reading.. See HMRC’s website.

To find out more about Optimise visit our website.

To access this program, from the main menu go to Accounts – Customer – Reports and choose Customer Review. After entering your criteria, a full screen of matches is shown with the option to drill in to the normal enquiry screen for a customer. After closing a customer’s screen the list remains for you to choose another customer or close.

To drill into a customer, either . . .

• use the up/down arrow keys to highlight the customer then press RETURN (or ENTER),
• OR double-click the customer,
• OR click on the customer then choose the DRILL option.

This is available free from version 3.12.0 onwards.

To find out more about Optimise visit our website.

This is especially useful if you have more than one database. Each database can be set up with a different colour so that, at a glance, you know which database you are using.

To change the colour (this affects all users not just you), you need access to the Company Edit program on Nominal Utilities. In here, there are two buttons – Next Colour and Previous Colour – which allow you to preview each colour (around 16 colours to pick from). When you find a colour you like, choose OK to save your choice.

Available from version 4.1.23.

To find out more about Optimise visit our website.