Making Tax Digital first quarterly return deadline – don’t leave it too late to sign up

Jul 22, 2019

In just over two weeks, UK businesses required to use Making Tax Digital (“MTD”) for VAT from 1 April 2019 will be due to submit their first quarterly VAT return under MTD for the quarter ended 30 June 2019. The deadline for this is 7 August 2019. There are also now just four days left to make sure you sign up in time for MTD for VAT. HMRC have also published a blog post setting out what needs to be done before 7 August.

It is important that businesses sign up for MTD at the right time. Readers are reminded that businesses which must submit VAT returns under the MTD for VAT rules must sign up to the service. This sign-up can be done by the business itself or its agent. If a business is not already signed up, it must wait at least 24 hours after submitting its final non-MTD VAT return before signing up. If payment of VAT is made by direct debit, businesses should allow five working days after the submission deadline for the final non-MTD for VAT return before signing up. Where payment is made by direct debit, the business must sign up at least 7 working days before the first MTD for VAT return is filed.

This means that businesses due to sign up and submit their quarter ended 30 June 2019 return in accordance with MTD for VAT and who pay by direct debit should sign up by this coming Friday 26 July 2019 at the latest. However businesses are being advised not to wait until the last minute to sign up in order to avoid issues with registration and new systems which can happen the first time a business is faced with a change of this type. Businesses must also decide on a suitable software package to use.

Businesses should also ensure that they receive email confirmation from HMRC that they have signed up before they file their first MTD for VAT return; HMRC are advising that this can take up to 72 hours to arrive.

HMRC have also provided details of what some error messages relevant to MTD mean:-

  • 403 (Client_Agent not authorised): the agent has missed a step in the agent journey or used the wrong credentials. 

    This will usually mean that HMRC’s systems do not recognise that:

  • there is an authorised agent/client relationship
  • the agent has set up an agent services account
  • the business has fully signed up to MTD; or 
  • incorrect credentials have been used when authorising the MTD software 

     

    • 403 (Forbidden): user is trying to submit a return for a period which is not yet closed. 

       

    • 404 (not found): user is trying to call back information for non MTD periods.

This can be received when: 

  • The request has been made before the business is fully migrated to MTD; 
  • The request is for an obligation period that pre dates the business joining MTD; 
  • Business is trying to submit a return to replace a paid Central Assessment on ETMP (the new VAT database). An error is returned because ETMP can’t process as no back end design in place; or 
  • The request is asking to view liabilities or payments for a period that is not within MTD (e.g. the business may not yet have submitted a return so no liability has been generated). 

 

  • 500 (internal server error): user has not waited the 72 hours for their record to migrate to MTD (refers to the time that needs to elapse between signing up to MTD and filing the first return; HMRC advises also waiting until the email confirming successful sign up has been received). 

     

  • 8508 (InvalidTraderVRN): user has either tried to submit a return via the old XML route or it’s a genuinely invalid VRN