Article ID: 2866
Last updated: 23 Mar, 2021
HMRC wants to transform the tax administration to be more effective, more efficient, and make it easier for taxpayers to get their tax right. Making Tax Digital (MTD) for VAT became mandatory for businesses on 1st April 2019. This means that businesses who have an annual turnover of over £85,000 are required to submit their VAT Returns to HMRC via MTD online services. As businesses will no longer be able to use third party software to file non-MTD VAT Returns from April 8 2021, to avoid disruption to your filing process, we recommend that you migrate your or your client's VAT business(es) across to MTD for VAT before this time. Filing VAT returns after HMRC remove the XML filing service provides further information on this change. Before you can submit VAT Returns under the MTD service, you need an Agent Services Account. This will allow you to access new and future HMRC online services and will allow TaxCalc to retrieve and submit VAT Return data to HMRC. Step 1: Register for an Agent Services AccountWhen registering for an Agent Services Account (ASA) with HMRC, you will need:
You need to go to this HMRC website and follow the process accordingly. We are unable to assist you with this part of the process and your queries will need to be directed to HMRC via their online support channel. You will see text for ‘Get help’ or ‘Is there anything wrong with this page’ link on the page in the online service you’re using. Once the registration has complete for an ASA, you will be issued with separate login credentials (the login ID will consist of 12 digits). These will not replace your previous government gateway credentials and you should ensure that you make a note of these for later use. You will also be issued with an agent reference number in the format of 'ABCD-123-4567'. This reference should be noted as it is used as a backup, should you lose your login credentials. Step 2: Link your VAT clients to your Agent Services AccountNow that you have your new ASA registered with HMRC, you have to link your government gateway account. By doing this, you will transfer the existing authorisation that is in place from your government gateway account. To do this, please see the below instructions:
Please Note: If you have multiple government gateway IDs and passwords for VAT services, you may need to do this for each set of credentials. There should be no need to re-authorise clients where you are already authorised to act on their behalf for online services. If you want to act for a new client that you have not copied across in this step, you can 'Ask a client to authorise you' from your Agent Service Account. A link will be sent to your client who can the follow the steps to authorise you. We are unable to assist you with this part of the process and your queries will need to be directed to HMRC via their online support channel. You will see text for ‘Get help’ or ‘Is there anything wrong with this page’ link on the page in the online service you’re using. Step 3: Enrol your clients' business for MTD VATIn order to do anything with your clients via your ASA, each business needs enrolling for MTD VAT. Unfortunately there is no automation in place and each individual business needs to go through the enrolment process. Therefore the decision needs to be made whether your client's will enrol their business themselves or whether you will do this on their behalf. After enrolling the client for MTD VAT, you will receive an email directly from HMRC (within 72 hours) to confirm the activation has taken place which will then allow you to submit your clients’ returns digitally. For more information on how to enrol a business, please see the link to the HMRC website. We are unable to assist you with this part of the process and your queries will need to be directed to HMRC via their online support channel. You will see text for ‘Get help’ or ‘Is there anything wrong with this page’ link on the page in the online service you’re using. Step 4: Authorise Your SoftwareNow that all of the setup with HMRC is in place, the below remaining steps are to get TaxCalc ready to start processing the MTD VAT submissions.
Step 5: Using TaxCalc - final setupBefore any VAT returns are processed, you should ensure that your new ASA credentials are saved in TaxCalc. You will need to go to Admin Centre> Applications> Double click VAT Filer > Filing Credentials > Insert the applicable details for your new account. Skip past the Token Management screen as this has already been complete by Step 4 and Finish and Save the details. From here, you can now start the process required to file the MTD VAT returns. If you would like further information on how to use TaxCalc for the processing of the VAT returns, please see the link to our video here. Common errors when using TaxCalc for MTD VAT returns can be seen below: 1046 Authentication error for VAT Filer Please note that this information was correct at the time of writing and is subject to change.
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