If you're having trouble connecting to MTD or submitting a VAT return under MTD in QuickBooks, don't worry! There are a few reasons why you might see the Take Action prompt. Let's go over some things to check and review.
Jump to:
- Check the email from HMRC
- Set up MTD in QuickBooks
- Use the correct MTD sign in credentials
- Make sure your VAT number matches the records of HMRC
- Check your most recent VAT returns
- Error "CLIENT_OR_AGENT_NOT_AUTHORISED"
- Error "taxReturnInvalidMTDEndDate"
- Check for outstanding obligations with HMRC
- Check the status page
1. Check the email from HMRC
When you register your business for VAT, you’ll be automatically signed up for MTD, unless your business is exempt or you have applied for exemption.
You'll receive an email confirmation that contains your MTD credentials, which you'll need to use when setting up MTD in QuickBooks Online.
Didn't get the email? Check your spam/junk folder. If you've been waiting longer than 72 hours, we recommend that you contact HMRC.
2. Set up MTD in QuickBooks
If you're having trouble submitting a VAT return under MTD, it might be because the MTD feature hasn't been set up in QuickBooks Online yet.
All you need to do is use your MTD credentials to link your QuickBooks Online account with HMRC's MTD service.
3. Use the correct MTD credentials
When you're setting up MTD in QuickBooks, make sure to use the credentials provided by HMRC specifically for MTD.
If you believe that you have used credentials that are not MTD credentials, you should disconnect and reconnect to MTD using the correct credentials.
The Government Gateway portal accepts various credentials and isn't limited exclusively to MTD. Avoid using any other credentials as this can cause in authentication issues, delays or submission failures for your VAT return.
If you're an accountant or bookkeeper, remember to create an agent services account specifically for HMRC's MTD services, separate from your HMRC online services for agents account.
4. Make sure your VAT details matches the records of HMRC
If you're having difficulties submitting a return under MTD, here are some possible reasons and ways to fix it.
VAT registration number mismatch
Check that the VAT registration number you use and the VAT accounting period in QuickBooks is the same as the one you use for your VAT purposes with HMRC.
To double check this before you submit a return:
- Go to your VAT settings.
- Check your VAT registration number and the VAT accounting dates.
- Then, sign in to the HMRC website to see if it matches what HMRC has on file.
Check the VAT accounting period
You might need to change the start and end date to the day before the start of the first quarter you're submitting.
For example, if the first quarter is from 1st June to 31st August, set the start and end date as 31st May.
- Go to Taxes.
- Select the VAT tab.
- Select Edit VAT.
- Choose Edit settings.
- Select Turn off MTD.
- File the period before the one that is due.
- Reconnect to MTD.
Filing status mismatch
Sometimes, there might be a period in QuickBooks or the HMRC system that is marked as 'filed' even though you don't actually need to file any tax returns for that time.
To fix this, we recommend reading out to the Support team for help, or directly contact HMRC.
5. Check your most recent VAT returns
You have a pending or unsuccessful submission
If you see an amber or red icon indicating a pending or unsuccessful VAT return submission, here's what you can do to resolve it:
- Go to Taxes.
- Locate the specific return and select Go for it.
- Follow the instructions.
Important: Avoid selecting Resubmit return for a rejected filing, as QuickBooks will attempt to resubmit it in the same way as the original filing.
The VAT return is older than one year
It's important to mark VAT return as filed as this helps keep your records up to date. If you have a VAT return that is more than a year old:
- Go to Taxes.
- Open the VAT return.
- Mark the period as Filed.
- If you need to, close your books.
You submitted your VAT return late
If you submitted a late return and marked it as filed, or if there is a period that overlaps with the current filing period, use the Help icon in QuickBooks to reach out to our Support for help.
You have an open VAT return
If you notice an open period in either QuickBooks or your HMRC account, it's important to verify the obligation status on the HMRC website as either "open" or "fulfilled". This is likely a state mismatch where the systems haven't synchronised.
Reach out to our Support team, and we'll notify our product team to update the state accordingly.
6. Error "CLIENT_OR_AGENT_NOT_AUTHORISED"
This is an error message from HMRC that indicates an issue. There are different reasons why this may show, but don't worry, here's how you can fix it:
Refresh the MTD connection every 18 months
To put it simply, you need to establish the connection between QuickBooks and HMRC every 18 months, a process known as 'reauthorising'. This is to meet HMRC's security requirements and keep your data safe.
To fix the issue, follow the steps depending on your subscription level:
You may have mistakenly used incorrect credentials
When you set up MTD in QuickBooks, remember to use the MTD credentials given to you by HMRC. See Check if you're using the correct credentials.
VAT registration number in QuickBooks doesn't match HMRC's records
See Make sure your VAT details matches the records of HMRC.
If you're an accountant/bookkeeper
If you have followed all the steps in this article but are still facing problems, check the following:
- Make sure you've set up the MTD for VAT feature in QuickBooks Online.
- You may not have permission from your client to submit VAT returns on their behalf. To request authorisation, log in to your agent services account.
- Link your clients to your agent services account for MTD.
7. Error "TaxReturnInvalidMTDEndDate"
This error usually happens for a number of reasons. Let's start with the most common one:
Your trying to file your VAT return too early
This error will show if you try to file your VAT return before the tax period is over. To fix it, make sure you submit your return at the end of the tax period.
MTD isn't set up in QuickBooks
Before you send your VAT return to HMRC under MTD, make sure you set up the MTD for VAT feature in QuickBooks.
You don't have permission to make a submission
If your MTD connection was set up by an accountant or member of your team and you didn't enter your own details, then you might not have the necessary permissions to make a VAT submission under MTD.
We recommend reaching out to the person who set up the connection. They can give your the necessary permission.
If you're an accountant or bookkeeper
If you have followed all the steps in this article but are still facing problems, check the following:
- Make sure you're using the correct agents services account to use HMRC's MTD services.
- You may need to link your clients to your agent services account for MTD.
8. See if you have any outstanding obligations with HMRC
If you owe anything to HMRC, they won't process your return until these obligations are fulfilled.
Before you submit your return, log in to your HMRC online account and make sure everything is settled and up to date.
Also, don't forget to enable yourself in the QuickBooks settings of your company file so that you can send submissions to HMRC.
9. Check the status page
Think there might be a site-wide problem? The first place to look is the QuickBooks status page. Here you'll find real-time reports of any outages when they happen, and when they’ve been resolved. You can also subscribe to get incident updates if you wish.
We're here to help
If you have questions about MTD, or need help getting connected or fixing an error, let us know. Sign in to QuickBooks and start a discussion with a qualified QuickBooks Online expert in our community.