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Submit a VAT return in QuickBooks Online

This article is for small businesses that are not yet eligible for Making Tax Digital (MTD).
If you have signed up for MTD, go to Submit a VAT return to HMRC - MTD for small businesses.

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

From April 2019, all eligible UK VAT-registered businesses will have to keep their financial records in a digital form and submit their VAT returns using approved software. Find out whether you are eligible here.
If you are on the Flat Rate Scheme or submit your VAT annually and have not signed up for MTD, you will need to file through the HMRC Government Gateway. Once you have 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.Status of filed return

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, go to http://www.gov.uk/guidance/sign-in-to-yourhmrc-business-tax-account

If you have never used your Business Tax Account, go to http://www.gov.uk/government/publications/use-hmrcsbusiness-tax-account.

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, go to http://www.gov.uk/government/collections/making-taxdigital-for-vat

To review the VAT return after it has been submitted to HMRC, select the ▼ drop-down arrow against the return to view your reports. You will now see Approved by HMRC.

VAT detail report

Note: When you submit your VAT return to HMRC, QuickBooks Online creates a journal moving the amount of VAT due from the VAT Control account to the VAT Suspense

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

It's not possible to un-file a return that has been submitted to and approved by HMRC. QuickBooks Online follows the 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.
Not currently. However, you are 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 are 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 will need to remove this as well.

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