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

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
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
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Why this happens: Your link between QuickBooks and HMRC is no longer active.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 fix:

Income Tax: Go to Income Tax settings and select Re-authorise. You do not need to turn off MTD. For more Income Tax troubleshooting, see Fixing errors in Making Tax Digital for Income Tax in QuickBooks.

VAT: Go to Edit VAT settings, turn off MTD, then reconnect QuickBooks to HMRC using your MTD credentials. Before you turn off MTD, file any outstanding returns for previous periods.

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: 

How to fix:

Step 1: Verify client authorisation
Make sure the credentials you use are specifically for MTD, not general Government Gateway logins.
If you're an accountant or bookkeeper, use an ASA registered with HMRC. General logins won't work. See: Accountant's guide to setting up QuickBooks for MTD (VAT and Income Tax)
Confirm your client has approved you in HMRC to submit returns (the digital handshake).

Step 2: Reset the connection, if Step 1 doesn't resolve it
Income Tax: Go to Income Tax settings and select Re-authorise.
VAT: Go to Edit VAT/ITSA Settings, select Turn off MTD, then reconnect using ASA credentials.

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: 

• Contact the QuickBooks support team for help updating your filing status
• Alternatively, contact HMRC directly to confirm your filing requirements

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

How to fix: 

• Visit the QuickBooks Status Page or HMRC’s Service Tracker for real-time updates.
• Subscribe to notifications for incident updates