This article is for small businesses who are eligible for Making Tax Digital (MTD) or signed up for MTD voluntarily.
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.
|Important: If you receive the error message client_or_agent_not_authorised and you need to re-authorise QuickBooks for MTD, click here.|
In order to submit VAT returns to HMRC for MTD, you'll have to first authorise QuickBooks to interact with HMRC.
Step 1: Enable MTD in QuickBooks
Go to Taxes and select Let's go. If you have dismissed the MTD message, follow the steps to enable MTD:
- Click on the Gear icon, then Account and Settings.
- In the Accounts and Settings page, select Advanced on the left menu. Then, select the Making Tax Digital header to expand the section. Click on Learn how to connect.
- On the Get started with digital tax page, click on Let's go.
Step 2: Authorise QuickBooks to interact with HMRC
Once MTD has been enabled in QuickBooks, it's time to connect QuickBooks to HMRC.
- Upon clicking on Let's go, you'll be directed to the HMRC page. Click Continue to sign in.
- Enter your HMRC credentials to sign in.
- Once logged in, click on Grant authority to continue. The authorisation process will begin.
- Once the authorisation has been given, you will receive a 'You're connected to HMRC' message as below. Click Continue.
- When the process has been completed, click on Take a look.
Once you have successfully completed these steps, the MTD badge will be enabled on the Taxes page. You can now submit your VAT return for MTD through QuickBooks.
How to re-authorise MTD
Now that your QuickBooks is authorised to interact with HMRC, you will need to reauthorise QuickBooks every 18 months based on HMRC's guidelines.
If you receive the error message client_or_agent_not_authorised and you've been submitting your MTD return for the past 18 months, follow these steps to disconnect and then reconnect your account which should get you back on track.
- Click the gear icon and select Account and settings.
- In Advanced, select Making Tax Digital.
- Hit Learn how to disconnect and follow the steps.
Once you have disconnected, let's get you reconnected.
- Make sure you are using the correct sign in credentials. To check, sign in to the HMRC website and if the Making Tax Digital message appears on the homepage then you are using the correct account. Note: If you don't know what your MTD credentials are, check your inbox and search for an email sent to you by Government Gateway. It will contain the correct MTD credentials.
- In QuickBooks, go to the Advanced section under Account and settings, select Learn how to connect.
- Select Let's go, this will take you to the HMRC page. Once you have read the guidelines, select Continue.
- Follow Step 2 in this article.
All done! You're now reconnected and can submit your VAT return for MTD through QuickBooks.
Note: If you are an accountant, please complete these steps in the client's books.
*QuickBooks MTD software currently supports Standard, Cash and Flat Rate schemes. QuickBooks Bridging Software supports Standard and Cash schemes. Annual submissions are not currently supported but will be coming soon. Businesses whose home currency is not GBP are currently not supported for MTD.