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Turn on MTD for VAT and connect QuickBooks to HMRC

SOLVEDby QuickBooksQuickBooks Online357Updated 1 week ago

We’ll show you how to enable Making Tax Digital (MTD) and authorise QuickBooks to connect to HMRC so you can submit a VAT return in an MTD-compliant way. 

New to MTD? Read our step-by-step guide to get started. If you're an accountant or bookkeeper, read this.

Important: If you see the message client_or_agent_not_authorised and you need to reauthorise QuickBooks for MTD, click here.

Step 1: Turn on MTD for in QuickBooks Online

Important: Make sure you're signed up for MTD for VAT with HMRC and received a confirmation email from HMRC before continuing.

Go to Taxes and select Let's go. If you have dismissed the MTD message, follow these steps to switch on MTD in your QuickBooks:

  1. Select the Gear icon to go to your Account and Settings.
  2. Select Advanced.
  3. Select Making Tax Digital to expand the section and select Learn how to connect.
  4. Select Let's go and follow the instructions.

Step 2: Connect QuickBooks Online to HMRC

Next, it's time to connect QuickBooks to interact with HMRC.

  1. Upon selecting on Let's go, you'll be directed to the HMRC page. Select Continue to sign in.
  2. Enter your MTD user ID and password to sign in. HMRC will have sent you these details via email when you signed up for MTD.
  3. Select on Grant authority to continue and the authorisation process will begin.
  4. Once you complete the authorisation process, you'll see a message 'You're connected to HMRC'.
  5. Select Continue.

Once you have successfully completed these steps, the MTD badge will will show on the Taxes page. You can now submit your VAT return for MTD through QuickBooks Online.

Something not quite right?

Don't worry, this article will show you how to fix common issues when connecting to MTD in QuickBooks Online.

What happens next

Now that your QuickBooks is authorised to interact with HMRC, you'll need to reauthorise QuickBooks every 18 months based on HMRC's guidelines. But don't worry, we'll let you know when it's time to reauthenticate the connection. All you'll need to do is enter your MTD user ID and password and we'll take care of the rest.

To disconnect from MTD in QuickBooks Online

  1. Select the Gear icon to go to your Account and Settings.
  2. Select Advanced.
  3. Select Making Tax Digital to expand the section and select Learn how to disconnect.
  4. Select Continue.
  5. Select Disconnect to confirm.
  6. Select Continue to return to QuickBooks Online.

See also

For more information, here's everything you need to know about MTD. Or, get answers to frequently asked questions.

Need help to submit a VAT Return to HMRC? Follow this checklist for small businesses. If you're an accountant or bookkeeper, read this.

*QuickBooks MTD software currently supports Standard, Cash and Flat Rate schemes. QuickBooks Bridging Software supports Standard and Cash schemes. Businesses whose home currency is not GBP are currently not supported for MTD.

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