Making Tax Digital VAT Pilot Scheme

Blog
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What is Making Tax Digital?

As you may be aware, HMRC are embarking on a radical overhaul of the way taxes are filed in the UK. These updates involve a number of business taxes and is collectively referred to as Making Tax Digital (MTD).

We’ve blogged about MTD in the past, so if you need to get up to speed, take a look here.

MTD for VAT Overview

The first area of development will be focused on VAT, with the new VAT filing systems going live by April 2019.

In preparation we have been working with HMRC to develop a VAT filing solution for business owners and agents that utilises the new MTD capabilities. We are enrolled on the pilot scheme and are ready to invite willing participants to try out the new tools.

What's new?

HMRC now provide more real-time information than was previously available. Under the current setup you could file your VAT return electronically with HMRC, and that was about it. With the MTD updates the following will now be supported.

View open and filed VAT obligations

You will be able to see a live picture of your VAT obligations, showing which periods have been received and what needs to be filed. For open periods you will simply be able to click on the corresponding link to instantly see a prepared VAT return, ready for submission.

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View payments and liabilities

As well as VAT obligations, you will also be able to see your current liabilities and recent payments with HMRC. This will make it easier to reconcile your HMRC position with your accounting records in QuickFile.

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New HMRC authentication process

With MTD comes a new authentication process for connecting QuickFile to your tax accounts. We’ve developed an area in QuickFile called ‘HMRC Connect’, from here you can connect your personal and organisation HMRC tax accounts and access the current and future filing capabilities deployed as part of the MTD programme.

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For Accountants and Tax Advisers you can connect an Agent Services Account from within your Affinity dashboard. This will then allow you to instantly access reports and file for all your connected clients.

Joining the Pilot Scheme

In the early stages of the pilot scheme HMRC will only be able to support limited VAT filing scenarios. At the time of writing those eligible to join would need to meet the following criteria.

  • No EC Sales or acquisitions (i.e. zero in boxes 8 and 9).
  • Standard accrual or cash base VAT accounting methods. Flat Rate scheme is not currently supported.
  • Payment returns only, repayments are not currently supported.

Within the next 7 days we will show a banner message (see below) in your account if you are eligible to join the pilot. This will ensure that we have been able to verify directly with HMRC that from previously filed returns you will be able to meet the criteria. If you would like us to manually check, just reply here or drop me a private message and we’ll look into this for you.

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It should also be noted that if you decide to join the pilot scheme, you will not be subjected to any additional scrutiny or compliance auditing than you otherwise would be on the existing scheme. The pilot is designed purely to assess the smooth operation of IT systems.

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I would be happy to be a part of the pilot scheme and should be eligible based on the criteria above.

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Thanks Ellen, I will send you a private message to discuss further.

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I’m a bit confused about how this MTD will work for me.

Main worry is that I currently have 2 government gateway accounts. 1 is for filing my self assessment (I’m a sole trader), and the other one is for filing my VAT return. I couldn’t register for VAT through the account that I already had, I had to register separately which created it’s own gvernment gateway account.

Will I have to file both through the same MTD account, can see this getting confusing.

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@Paulwk1972 that shouldn’t cause any problem. QuickFile will allow you to connect multiple tax accounts and in your VAT settings area you can assign the appropriate tax account for VAT filing.

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I have an affinity acc, can I use the pilot for those clients

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@George_H yes, providing the client has been cleared by HMRC, it won’t be a problem.

We have a list of all VAT Numbers that are eligible to join the scheme, we have loaded those into our system and from tomorrow, on the VAT overview screen for each account you will be able to see if a given client is eligible from the following banner.

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To save you time checking each one I can also query an Affinity account for any matches. If you’re fine for me to do that I will send you a separate private message… or feel free to message me first with your Affinity account number.

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When you say " on the VAT overview screen" do you mean the VAT settings page?

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Not the VAT Settings page, the page before this that shows you a list of all your previously submitted returns. It won’t appear there yet, but it will by mid-afternoon today.

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What about Agents ? I am not using Government Gateway dedicated to each client but only One Log In to my online agent platform So how I will be able to deal with MTD to send VAT to HMRC ?

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The authentication process for agents will work much the same as it does for a regular Tax Account. We’re not quite there with agent support yet, although this should be ready within the next 4-6 weeks.

We also intend to allow an Affinity account holder to complete Agent authentication via their Affinity account, without requiring you to individually authenticate for each of your clients.

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I am actually Affinity user, so sounds good for me. Need to be patient more :wink:

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Hi,
Will you be able to support the flat rate scheme for filing vat digitally prior to 1 April 2019 ?
Thanks

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Yes we will be supporting the Flat Rate Scheme on or before 1st April 2019.

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HI,

Like lots of others I am quite confused having just received an HMRC letter saying I can join the MTD Pilot Scheme.

I am a contractor with a Limited Company and file VAT returns quarterly myself through the HMRC Gateway, however my accountant deals with my personal and corporation tax. Does anyone know exactly what I should do?

Thanks,

Errol

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My latest return (Oct-Dec 2018) will include EC acquisitions (i.e. non zero value in box 9).
Is this still not supported in the pilot period?

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Hi Dave, (cc: @captain )

We’ve not received any notification from HMRC to suggest that EC Sales / Acquisitions are supported. The last update we received was on the 20th December to notify that the MTD VAT pilot is now open to Partnerships and Flat Rate Scheme users.

I will contact HMRC to see when this will become available.

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Hi Glenn,

I’ve just spoken to a member of the MTD team (requested callback from helpline). They told me that they now support returns that include EC acquisitions (i.e. non zero value in box 9). They have seen customers submit returns via MTD that include box 9 figures.

Do you as a software provider support the above?
If so, what do I need to do to submit my return?

Thanks,

Dave

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Hi Dave,

Yes we do support this scenario. You just need to enrol on the MTD scheme with HMRC and connect your Tax Account to QuickFile as per the steps here. Let me know if you get stuck with anything.