Mtdfb Vat Guide For Vendors

This guide is designed to help software developers/designers understand how your software will interact with HMRC systems and what it will need to

do. Product owners and business analysts can also use the guide to further their understanding of Making Tax Digital for Business (MTDfB).

For ease, the Guide is split into a number of different sections, these are;

Making Tax Digital is a key part of the government’s plans to make it easier for businesses to get their tax right and keep on top of their affairs.

Every business now has access to their own digital tax account and these are being regularly expanded and improved. HMRC’s ambition is to

easier for customers to comply.

Keeping records digitally and providing updates to HMRC direct from the software will reduce the amount of avoidable errors businesses currently

make (and the cost, uncertainty and worry they face when HMRC is forced to intervene to put things right). This streamlined digital experience will

integrate tax into day-to-day business record-keeping in a way that gives businesses confidence that they have got it right and provides them with a

remain voluntary for VAT registered businesses below the VAT threshold until 2020 at the earliest.

98% of VAT returns are submitted digitally (either directly by the business or by their agent), but although many businesses use digital accounting

products, some of which are enabled to send VAT returns direct from the software, the vast majority currently submit their VAT return using HMRC's

online portal.

MTDfB will enable businesses to use record keeping software to record transactions. Businesses can update their software whenever they like, with

digital record keeping normally done in close to real time, when or soon after business transactions occur. This expectation will be underpinned by a

requirement for subscribed businesses to send a summary update (a VAT return) that will be generated and sent using software or an app. Most

businesses will do this on a quarterly basis but some businesses currently file VAT returns on a monthly or annual basis and this will continue under

The new requirement to keep digital records will not include an obligation to make and store images of invoices and receipts digitally. The digital

enable HMRC’s customers to comply quickly, easily and securely with their obligations to account for tax digitally. Supporting this key functionality are

a range of additional service elements, including Registration, Subscription, Authorisation and Payments. Further details on how these all align can be

found in The Customer Journey section.

We are currently developing Business Validation Rules for VAT and more detail will follow once we have agreed our approach/timeline for their

To send a VAT Return, software will need to provide the relevant information needed to complete the VAT Return using the customer’s digital records.

The Period Key provided with the obligations must be sent with the relevant return. HMRC also requires software to ask the customer to sign a

declaration before submitting the return (this endpoint will be available in December)

Please note there is no calculation for VAT.

The process

There will also be the ability to view previously submitted returns (post MTD returns) through software.

HMRC would like vendors to present messages to Business users at key points in their journey that give them the option to make payments ahead of

any obligation date to help spread the cost. Likewise we will help deliver functionality that allows vendors to make users aware of payment dates.

There are multiple ways to make a payment for the VAT regime, so we have listed them all on GOV.UK at https://www.gov.uk/pay-vat and advise

vendors in their messaging to ask customers to visit that link so the customer can make a payment in the method that best suits them.

the link above.

In order for a Business to see what previous payments they have made to HMRC, we would like vendors to present messages at key points in their

journey that encourage them to visit their Business Tax Account.

The login page is https://www.tax.service.gov.uk/gg/sign-in?continue=/business-account and we advise vendors in their messaging to ask customers

to visit that link.

HMRC believe that some Businesses may want some assurance and wish to view information in to help them manage their tax affairs. They may also

want a view of their previous updates and confirm these have been received via HMRC.

We continue to use GOV.UK - the website for the UK Government - as our primary way to provide users with guidance on government services and

information. Initially, the guidance will:

We would like your package to make users aware of the links to the guidance detailed above if they are interested in the service.

Once an agent has registered for Agent Services they will be able to register clients for taxes and sign them up to the MTDfB Service, allowing them

to join from the start of their business lifecycle. This will not be mandatory for all customers, only those with annual turnover above the VAT threshold

We are developing a Customer Support Model which will help guide HMRC Customers to the most appropriate support. This may be provided by

To be added in future versions.

To be added in future versions.