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Fix MTD (Making Tax Digital) issues in QuickBooks (VAT and ITSA)

by Intuit53 Updated 1 week ago

If you’re having trouble connecting QuickBooks to HMRC for Making Tax Digital (MTD), don’t worry. This article covers common issues for VAT and Income Tax Self Assessment (ITSA) and how to fix them.


Before you begin

Keep these points in mind before troubleshooting:

  • QuickBooks supports Standard, Cash, and Flat Rate VAT schemes.
  • Bridging software supports Standard and Cash schemes only.
  • Businesses with a home currency other than GBP aren’t currently supported.
  • HMRC requires QuickBooks connections to be reauthorised every 18 months.

Quick 3-step checklist

Before troubleshooting, check the following:

  1. Correct MTD login – For accountants and bookkeepers: Use only an Agent Services Account (ASA). Business owners use their own Government Gateway login.
  2. Client authorisation – For accountants and bookkeepers: Make sure your client has approved you in HMRC to submit returns (digital handshake).
  3. No overdue filings – For everyone: Check that there are no unpaid or overdue returns with HMRC.

These three checks prevent most MTD errors.


Step-by-step troubleshooting

Each section below includes: Why this happens and How to fix it.

Why this happens: MTD isn’t turned on in QuickBooks, so you can’t send your VAT or ITSA returns yet.

How to fix:

  1. Follow this link to complete the steps in product Open this link in a new window
  2. Select Set up MTD.
  3. Follow the on-screen instructions.
  4. Enter your MTD credentials (from HMRC).
  5. Authorise QuickBooks to interact with HMRC.

Once authorised, an MTD-enabled badge will appear on the dashboard.

Tip! Always use MTD-specific credentials. For accountants or bookkeepers, this means using an ASA. Regular HMRC credentials won’t work.

Why this happens: The details in QuickBooks (like your VAT number or accounting periods) don’t match what HMRC has on file.

How to fix:

  1. Follow this link to complete the steps in product Open this link in a new window
  2. Check your start date for the first return — it should be the day before the tax period begins.
  3. Go to Edit VAT/ITSA Settings.
  4. Turn off MTD, file any previous periods, then reconnect to MTD.

Why this happens: HMRC needs to confirm your registration before you can use MTD. The email might be in your spam folder, or HMRC might still be processing your registration.

How to fix:

  1. Check your Spam/Junk folder for emails from HMRC.
  2. Wait up to 72 hours for HMRC processing.
  3. If you still haven’t received the email, contact HMRC to confirm your registration and request credentials

Why this happens: Your link between QuickBooks and HMRC is no longer active. Connections automatically expire every 18 months to keep things secure.

How to reauthorise:

  1. Follow this link to complete the steps in product Open this link in a new window
  2. Go to Edit VAT/ITSA Settings.
  3. Turn off MTD.
  4. Reconnect QuickBooks to HMRC using correct MTD credentials.

Why this happens: You have unpaid filings or overdue returns with HMRC. QuickBooks won’t let you submit new returns until these are cleared.

How to fix: 

  1. Log in to your HMRC account.
  2. Check for overdue returns or unpaid amounts.
  3. Clear obligations before submitting through QuickBooks.

Why this happens: QuickBooks can’t connect to HMRC because the login credentials are wrong, your client hasn’t authorised you, or the details you entered don’t match HMRC records.

How to fix: 

Step 1: Reauthorise QuickBooks Online

Step 2: Verify client authorisation

Why this happens: You tried to file too early, or your permissions aren’t set up correctly.

How to fix: 

  1. Wait until the end of the tax period before filing your return
  2. Confirm permissions are active in QuickBooks and HMRC

Why this happens: QuickBooks or HMRC thinks a return has already been filed, even though no return is needed.

How to fix: 

Why this happens: QuickBooks or HMRC systems are temporarily down or having problems.

How to fix: 


Guidance for accountants and bookkeepers

  • Always use an ASA for clients.
  • Confirm your client has approved the digital handshake (this is HMRC’s way of linking your ASA with the client’s account).
  • Keep client info (UTR, NI, trading name) and two forms of ID ready.
  • Reauthorise connections every 18 months.

See: Accountant’s guide to setting up QuickBooks for MTD (VAT and ITSA)

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