Troubleshooting MTD (Making Tax Digital) issues in QuickBooks Online

Learn how to fix common issues with Making Tax Digital (MTD) in QuickBooks Online, including problems connecting to HMRC or submitting VAT returns, with this step-by-step guide.

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All you need to do is use your MTD credentials to link your QuickBooks Online account with HMRC's MTD service.

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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:

1. Go to your VAT settings.
2. Check your VAT registration number and the VAT accounting dates.
3. 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.

1. Go to Taxes.
2. Select the VAT tab.
3. Select Edit VAT.
4. Choose Edit settings.
5. Select Turn off MTD.
6. File the period before the one that is due.
7. 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.

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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:

1. Go to Taxes.
2. Locate the specific return and select Go for it.
3. 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:

1. Go to Taxes.
2. Open the VAT return.
3. Mark the period as Filed.
4. 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.

Reach out to our Support team, and we'll notify our product team to update the state accordingly.

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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 fix the issue, follow the steps depending on your subscription level:

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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.