It’s become clear that HMRC is struggling with the rollout of Making Tax Digital (MTD) – both in terms of the technology infrastructure and their support resources. Here are a few helpful pointers to help you navigate MTD:
If you haven’t yet registered for MTD
In future, to submit your VAT returns via your accounting software you need to register with HMRC for Making Tax Digital. HMRC suggest that you register for MTD at least seven days before your next VAT return is due. If you pay your VAT bill by Direct Debit, you won’t be able to sign up in the seven days leading up to, or the five working days after the VAT return is due.
Steps to take:
You’ll need to have the VAT number of the business you’re signing up and your Government Gateway user ID and password handy.
If you use Xero, once you’re set-up with HMRC, you’re ready to complete your Making Tax Digital VAT return. (Xero has published some useful guidance on this process if needed).
Error message when trying to file your MTD VAT returns
From our experience, here are a few troubleshooting tips:
Have you registered in the last couple of days? If so it can take HMRC up to 72 hours to move your info over to the new system. You might see the following message:
Have you linked Xero to your HMRC account? If not you will get a message asking you to connect to HMRC, click on the blue button and follow the steps to connect Xero to HMRC using your government gateway details.
Your deadline for filing is approaching and you can’t get it filed
If the deadline for filing your VAT returns is approaching and you really can’t get your return filed, here are our suggestions on what to do:
Open the VAT return in Xero and click “View” next to the following option
Enter the date range for your current return Check and review the figures. You will also need to calculate the liability from the box totals in the report (amount in box 1 less amount in box 4 – this is the figure you need to pay)
Make your payment to HMRC
If you have a direct debit in place you will need to cancel this and setup again later when the issues with MTD are fixed
Let HMRC know that you have made the payment but could not submit the return due to technical issues their end. The best way to contact HMRC is to give them a call on this number 0300 200 3700. You will need your VAT number when you speak to HMRC (this can be found in Xero – under Accounting, then Advanced, then Financial Settings)
Lock Xero to the day of your last VAT quarter – this will ensure that the figures do not change
File the return when the HMRC connection is working
Here is a link to the Xero MTD help resources and contact information
Here is a link to the HMRC MTD help resources and contact information
We hope this helps. Most importantly, we want to reassure you that if you are struggling with MTD, you are not alone!