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Set up MTD (Making Tax Digital) for VAT in QuickBooks Online

by Intuit•72• Updated 5 days ago

Learn how to set up MTD (Making Tax Digital) for VAT in QuickBooks Online so you can track taxes and submit VAT returns electronically to HMRC.


Before you begin

  1. Set up VAT in QuickBooks Online: Ensure your VAT is configured correctly and the VAT registration number matches HMRC’s records. This helps avoid errors when connecting MTD.
  2. Check VAT scheme eligibility:
    • QuickBooks supports MTD for Standard, Cash, and Flat Rate VAT schemes.
    • Businesses using non-GBP home currency or unsupported VAT schemes can't use MTD in QuickBooks.

Here's how to enable MTD for VAT in QuickBooks Online:

How to connect:

  1. Go to Taxes in the left menu (Take me there)
  2. Select Set up MTD
  3. Click Authorise now, then select Continue
  4. Log in to HMRC in the pop-up window using your Government Gateway credentials:
    • Enter your HMRC Government Gateway user ID and password
  5. Select Give permission to allow QuickBooks to connect with HMRC
  6. Once authorised, click Continue, then select Go to Taxes

When completed, you’ll see an MTD badge on your Taxes dashboard, confirming that MTD for VAT is enabled. You’re now ready to submit VAT returns digitally to HMRC.

HMRC requires reauthorisation every 18 months to maintain secure access. QuickBooks will notify you in advance when reauthorisation is needed.

How to reauthorise:

  1. Follow the prompts in QuickBooks when reauthorisation is required
  2. Log in using your HMRC credentials in the pop-up window

After reauthorisation, QuickBooks will reconnect, and you can continue submitting VAT.

To make changes to your MTD settings:

  1. Select the ⚙️ gear icon, and then Account and settings
  2. Go to the Advanced tab
  3. Next to Making Tax Digital, select the 🖉 pencil icon to update your preferences

Before disconnecting MTD, please note the following:

  • QuickBooks will stop sharing data with HMRC.
  • Digital VAT returns can no longer be submitted through QuickBooks.
  • You can reconnect to MTD at any time by reauthorising.

How to disconnect:

  1. Select the ⚙️ gear icon, then go to Account and settings
  2. Open the Advanced tab and locate Making Tax Digital
  3. Select Learn how to disconnect, then click Continue
  4. Confirm by selecting Disconnect, then return to QuickBooks

Troubleshoot connection issues

If you encounter issues, refer to our guide on Troubleshooting MTD issues for step-by-step solutions. This includes:

  • MTD connection errors
  • Login problems with HMRC
  • MTD badge not appearing

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.

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