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Submit a VAT return in QuickBooks Online

SOLVEDby QuickBooksQuickBooks Online2584Updated February 14, 2022

This article is for small businesses that are not yet eligible for Making Tax Digital (MTD). Find out whether you're eligible here or if you've already signed up for MTD, go to submit a VAT return to HMRC. All eligible UK VAT-registered businesses will have to keep their financial records in a digital form and submit their VAT returns using MTD-compliant software.

Note: XML Submissions (which are non-MTD submissions) are no longer supported in QuickBooks Online. As part of the 2020/21 tax year changes, HMRC have made the decision to discontinue XML submissions as of Thursday 8 April, 2021. This means that any VAT-registered customer not yet signed up to MTD will be unable to submit XML returns via QuickBooks Online.

If you're on the Flat Rate Scheme or submit your VAT annually and haven't signed up for MTD, you'll need to file through the HMRC Government Gateway. Once you've filed through the gateway, go to Mark your VAT as filed in QuickBooks to close the period.

Check your reports to make sure your figures are correct. Select the ▼ drop-down arrow next to Prepare/Submit return to view the following reports:

  • VAT 100 Report (This report shows you the summary information for each box on the VAT return.)
  • VAT Detail Report (This report lists transactions that are included in each box on the VAT return.)
  • VAT exceptions and reports (Ensure that no VAT collected, or credits earned are missed or duplicated.)

If you need to make corrections to your sales or purchase VAT, read this article to adjust your VAT liability.

To submit your VAT return directly to HMRC from Quickbooks Online, follow these steps.

  1. Go to Taxes, then select VAT
  2. Select Submit return to view your open return.
    Submit Return
  3. Confirm the dates and figures are correct. When you are ready to submit your VAT return to HMRC, select File online with HMRC.
  4. Enter your Government Gateway User ID and Government Gateway Password, then select Yes, I want to proceed. QuickBooks Online will now connect to HMRC to submit your VAT return.
  5. When HMRC receives your VAT return, you will see the "Pending with HMRC." status and a message which says "HMRC is on the case. We'll notify you when the status of your VAT return changes."
    Pending with HMRC
  1. Select Close and continue working.
  2. If your VAT submission is successful, the status will change to Approved by HMRC. You will be able to see the filing when you log into your HMRC account.

Alternative ways to submit VAT return

Customers who submit via XML will need to find alternative ways to submit their VAT return as outlined below.

Submit your VAT Returns using your Business Tax Account

For further information and to access your Business Tax Account, click here.

If you have never used your Business Tax Account, go here.

Submit your VAT Returns using an agent

You can appoint an accountant or other approved agent to submit your VAT Returns for you. Agents will also be unable to use XML software. However, they can submit your VAT Returns using their online agent account.

Once your VAT account has moved to the new IT system, your agent can use their Agent Services Account to continue submitting your VAT Return. If you have an agent, please speak to them now about this.

Sign up to Making Tax Digital (MTD)

If you are a business with a taxable turnover above £85,000, you should already be following the MTD rules. You must do all of the following:

  • Sign up to MTD
  • Keep digital records
  • Submit your VAT Returns using MTD compatible software

Submitting VAT Returns using XML software does not meet the MTD rules. If your taxable turnover is below £85,000, you can sign up for MTD voluntarily before April 2022. This is because from April 2022 all VAT businesses, no matter what their taxable turnover is, must sign up to MTD. For further information on signing up for MTD VAT click here.

  1. In Taxes, click View return against the VAT return you wish to view. Or select the ▼dropdown arrow for more options.
  2. You will see 'The VAT return was accepted by HMRC', as well as details of the submission.
  3. Click Done to close the window and return to the Taxes dashboard.

If you don't have the option to submit your return or you prefer to file your VAT directly with HMRC, follow these steps to mark your return as filed and close the period.

  1. Go to Taxes, then select VAT.
  2. Select Prepare return to view your open return.
  3. Confirm the dates and figures are correct. When you are ready to submit your VAT return to HMRC, select File online with HMRC.
  4. Select Submit a VAT Return/Set up a VAT Direct Debit Instruction, then select Submit a return. Copy the amounts from your QuickBooks Online return to the HMRC website.
  5. Once you're done, go back to QuickBooks Online and select Mark as Filed.

Note: When you mark your VAT period as filed, QuickBooks Online creates a journal moving the amount of VAT due from the VAT Control account to the VAT Suspense.

You can now close the books to protect transactions entered in the quarter you just filed.

Once you've paid off the liability to HMRC, you can record a VAT payment or refund.

  • VAT control is where all of the VAT is stored that makes up your VAT return. Transactions that use a VAT code will post the VAT element of the transaction to this account and this will be used to calculate your VAT return on the applicable dates. Any transactions (such as journals) posting to VAT control directly without a VAT code being used will not appear on the VAT return.
  • VAT suspense is where the VAT filing is stored once it is filed within QuickBooks. When you are satisfied that your VAT return is complete, when a filing is made to HMRC, or the period is marked as filed, the value of the return will move out of VAT control and move to VAT suspense where it will be stored until payment is made. When a payment is made in the taxes page to record the payment made to HMRC, the money will be removed from VAT suspense and then the selected bank account will decrease by the value of the return.

It's not possible to un-file a return that has been submitted to and approved by HMRC. QuickBooks Online follows HMRC process that any adjustments that need to be made to a VAT return already submitted to HMRC will typically require you to make a subsequent VAT return.
For further clarification on this, we recommend contacting HMRC directly.

It's not possible to un-file a return that has been submitted to and approved by Revenue. QuickBooks Online follows the Revenue process that any adjustments that need to be made to a VAT return already submitted to Revenue will typically require you to make a subsequent VAT return.
For further clarification on this, we recommend contacting Revenue directly.

Not currently. However, you're able to save your Revenue user ID and password using your browser. To do this, select the prompt Remember my password, then select Save or Yes.

Not currently. However, you're able to save your HMRC user ID and password using your browser. To do this, select the prompt Remember my password, then select Save or Yes.

When typing your password, ensure you type all letters in lower case. If you're already doing this, then your VAT registration number may be causing the issue. Select Edit VAT, then select Edit settings. Make sure that there are no spaces between characters in your VAT registration number. If the number starts with GB, you'll need to remove this as well.

  1. Your VAT control may not match with your VAT return if you've added any transactions in the period after the VAT return has been created.
    For example, if you've filed the return for the period 01/01/2021-31/03/2021 on 07/05/2021, but in between, if you've added transactions after 31/03/2021, then those will also show in the VAT control.
  2. If you have added/deleted/amended transactions from the previously filed period, then those transactions would show up in the next open VAT period as exceptions.

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