MTD VAT submission can only be processed when the onboarding steps are complete.
It is mandatory for VAT-registered businesses over the VAT threshold (currently £85,000) to submit VAT return information through an MTD compatible software.
Check when a business must follow the rules for Making Tax Digital for VAT
Step 1.
Navigate to Tax > VAT > VAT Return.
Step 2.
HMRC will send us the VAT obligation dates that they believe you should submit for the business. Once received, the obligation period will be marked with an MTD tag and you can start creating a VAT return by clicking on the Get Started button.
You can troubleshoot using the guide below if you have not received your obligation periods:
The Create custom VAT report button allows you to view a VAT return for any specified period of time. You cannot submit a custom VAT report to HMRC.
Step 3.
On the next page, you can review the VAT return values of the obligation period. You can include any invoices not picked up by previous returns by ticking the check box beside Include late invoices.
To proceed click on the Create draft VAT Return button. A pop-up box will then appear, click on the Continue button to confirm.
Async Creation Process
If you have a large number of transactions being added to the return, the return will go through our Async process which will allow you to navigate from the page while the return is collating. This message is shown below.
Once the process is complete a message will be displayed under Tax > VAT > VAT overview asking you to save the return. If you do not save your Async return and transactions are added to the system which can also be included in the Async return, the message will be updated to allow you to include these transactions as shown below:
Step 4.
After reviewing the invoice breakdown and you are satisfied with the values, you can click on the Finalise Draft Return button to proceed. A pop up box will then appear, click on the Continue button to confirm.
Finalising the return will generate a sales invoice from your HMRC contact if you are owed money or a bill to your HMRC contact if you owe money to HMRC for VAT. The invoice date is set to the last day of the VAT quarter to which it relates.
Step 5.
Once you have finalised the VAT return, you must click on the Submit to HMRC button to send the VAT return data to HMRC.
The data submitted to HMRC are the total values shown in the 9 boxes in Green below.
Once this has been successfully submitted, the system will generate a Receipt ID which will have been returned from HMRC. You can then click Back to Overview where all historic returns will show under Existing VAT Returns.
A Submitted to HMRC message will be displayed in green for any returns that have successfully been submitted to HMRC.
If you want to change the HMRC contact on the bill for future returns, you can update this on the Settings > Organisation > Details&Tax > Tax menu.
