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How do I get Business Finance Assistant set up for submitting VAT returns in compliance with Making Tax Digital?

  • Updated

VAT-registered businesses in the UK have been required to use the HMRC Making Tax Digital (MTD) service to submit their VAT returns online since 1 April 2019 with the accounting software they use to run their business.

 

With that in mind, we’ve put together this useful guide to get you compliant and filing online
directly from your Business Finance Assistant account.

  • Please use a computer, not a mobile device, to file your VAT return.
  • Please note that HMRC requires you to reconnect your Business Finance Assistant account to your HMRC account every 18 months.

We recommend not importing historical transactions but starting afresh with a new quarter with Business Finance Assistant. Please note that VAT returns from over 366 days ago cannot be filed with Business Finance Assistant.

HMRC will automatically sign all businesses to Making Tax Digital for VAT unless they are exempt or have applied for exemption.


There are three main steps to filing your first VAT return:
1. Connect Business Finance to HMRC
2. Prepare your accounting for VAT return
3. Preview and File VAT Return

 

Section 1: Connect Business Finance Assistant to HMRC in 3 steps


1. Connect Business Finance Assistant to HMRC

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Go to the VAT report screen. Click Connect to HMRC. Enter your VAT Registration and click “Connect to HMRC now.”


2. Click Continue

3. Sign in to Government Gateway

4. Enter User ID and password

 

You will be redirected back to Business Finance Assistant.

 

Section 2: Prepare your accounting for VAT return


1. Invoices

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Ensure that all Invoices are entered for the current VAT period. 

2. Bank Sync

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Check that all business bank accounts are synced to Business Finance Assistant up to the end of the VAT period.

 

The notifications bell is a good spot to look if you haven’t synced in a long time. If any transactions are missing, click the Actions button > Refresh / Sync Transactions or Import bank statement.

 

3. Categorise transactions in each bank account

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Set the Customer/Supplier, Category and VAT rate on any transactions that have not been set automatically.

You can check the checkboxes alongside the transactions to update the VAT rate of multiple transactions simultaneously.

For any transactions that require receipt justification, upload receipts to bank activity. Press 'Upload expenses' to automatically create an expense, which will attach to your transaction. Press the 'Justify' button from within the expanded view to upload a photo of a receipt without creating an expense.

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Click the 'Done' and then press the 'Confirm' button alongside each transaction line to save.

 

Section 3: Preview and File VAT Return

1. Go to the VAT Return page to check the details of the VAT Preview

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2. Ensure the correct range is selected. Click on the Collected and Deductible rates to see what is included.


3. Click the Preview VAT Return button on the VAT Return screen

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4. Preview the details of boxes 1–9. Carefully read each disclaimer box on the right and tick them off when completed. If it’s incomplete, click Cancel to go back and finish those tasks.

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5. Once you’re ready, click “File with HMRC”.

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When your return has been submitted, you will see the confirmation box above.

 

Please watch our video guide for more information about filing your VAT return: VIDEO - VAT RETURNS

 

 

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