Submit Making Tax Digital VAT Returns for Clients

With the introduction of Making Tax Digital, Her Majesty’s Revenue and Customs (HMRC) rolled out a new digital service for agents, which is accessible via a new agent services account (ASA). A remarkable initiative by the United Kingdom government, stated as Making Tax Digital (MTD), was introduced on 1 April 2019. MTD intends to make certain that companies, listed for Value Added Tax (VAT), with taxable income in excess of the VAT threshold of £85,000 must complete and share their Value Added Tax returns via desktop or cloud-based accounting software. This initiative is focused at keeping the Value Added Tax records digital. Her Majesty’s Revenue and Customs (HMRC) aims to augment its digital processes and grow into the best digitally innovative tax authority. MTD lays stresses on making vital adjustments in the tax filling arrangement and make operations more carefully planned and systematic for taxpayers. For businesses where returns are filed with the support of the internal team, and not managed through an accountant or book keeper, it turn out to be vital for a corporate to methodically comprehend the necessities and considerations of Making Tax Digital. VAT registered businesses, which can register for Making Tax Digital, are a not-for-profit organisation, a partnership, a trust, part of a VAT group or division, or a sole trader.

What is an Agent Services Account?

To access HMRC digital services such as Making Tax Digital, an agent services account is a new system. Agent services account is being used together with the prevailing agent portal and doesn’t replace it. However to begin with, it is being used for fresh HMRC digital agent services only. The existing, acquainted agent IDs and government agent portal will be used for prevailing HMRC online services for agents. The agent services account has a noteworthy feature i.e. each organisation will and can have one agent services account only. The agent services account is mapped to the Unique Taxpayer Reference (UTR) number of the firm. Numerous organisations have quite a few diverse government gateway agent credentials for diverse taxes, offices etc. An organisation will be required to link the government gateway credentials to the new agent services account once an organisation has set up its agent services account.The linking procedure defines a dynamic link amongst the new agent services account and the prevailing government gateway agent credentials. This permits agent-client association in the prevailing government gateway credentials to be documented when getting into services via agent services account. In order to use a software to connect directly with HMRC an organisation must:
  • As part of the HMRC’s MTD, submit a Value Added Tax return
  • As part of HMRC’s MTD pilot, send tax updates
  • Change the customer's business particulars for Value Added Tax
  • List an estate online for somebody who has died
  • List a trust online

Requirements for creating an Agent Services Account for MTD for VAT

In order to create an agent services account, it will be beneficial to have the below mentioned information handy:
  • An individual will require the Unique Taxpayer Reference (UTR) if he/she is in a partnership or self-employed, whereas a limited company will require the corporation tax reference number. Also, the associated postcode will be required
  • Also, an individual will need details of an anti-money laundering regulatory body, comprising of – name of the regulatory body’s name, membership number and expiry date of the membership
  • Furthermore, the Government Gateway identification number and password will be required – it is the same used for signing into the prevailing HMRC digital services for agents
The method of setting up an agent services account comprises of defining a new government gateway user identification code. It is imperative to keep a track of these specifics as it is not easy to retrieve them later. These facts will be required to access the agent services account and other services accessible through the agent services account. It is important to note that the new user credential is different for the existing government gateway user credentials. Agents should sensibly think through about the email id used for setting up the new government gateway identification code and agent services account – the e-mail id must be a centralised one, which has some longevity. Presently, it is not possible to alter information in an agent services account such as the email id; HMRC is working towards developing this functionality.

How to register for an Agent Services Account for MTD for VAT?

In order to register for an agent services account, begin by visiting the official access services webpage and log in using the Government Gateway user ID and password. Other options such as create new sign in details, password recovery, and Government Gateway user ID recovery are also available on this webpage. Once a user has logged in, enter information pertaining to the type of business registered such as a limited company, sole trader etc., along with additional details regarding the account. The following screen will highlight the information HMRC holds around the practice, and these must be cross-checked and confirmed before moving forward. In case of any misrepresentation of facts, an individual will be required to get in touch with HMRC individually to request an amendment. Once the details are checked and approved, the user will be asked to create a fresh Government Gateway account to be used with the agent services account.

Adding existing or new clients to MTD for VAT using the Agent Services Account

The below mentioned steps can assist in adding new clients:
  • Existing clients will have to be moved from HMRC digital services for agents account. Do this by clicking on “link current VAT and self-assessment clients to this account”
  • Enter the Government Gateway user ID created for HMRC online services for agents – the Government Gateway user for ASA is not to be used here Once logged in, provide the necessary details to move client accounts to a new ASA
  • To link a new client, select “ask a client to authorise” – provide the client’s Value Added Tax registration date and registration number
  • Select the software used by the client, for instance, Nomisma Solution Once the details are provided, an authorisation email will be sent to the client and they must click the link inside 14 days
  • Once a client is signed up to MTD, wait for 72 hours to obtain authorisation from HMRC

Considerations when signing up clients for MTD for VAT

Agents will be required to educate the clients about Making Tax Digital and also update the system for MTD submissions. The below mentioned instructions need to be used and the same must be communicated to the clients:
  • If a business pays through direct debit, before signing up for Making Tax Digital for Value Added Tax, they must wait for five working days post the filing cut-off date of the final non-MTD return. Additionally, the business should permit a minimum of seven working days prior to the filing deadline to file the initial Making Tax Digital for VAT return
  • If a business pays through a non-direct debit technique, a business must agree to a 24 hour time span post the most recent non-MTD return prior to signing up, and 72 hours post signing up before filing the initial return under Making Tax Digital.
Read more about Making Tax Digital