VAT-registered businesses in the UK have been required to use 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.
N.B. Please use a computer and not a mobile device to file your VAT return.
Before connecting any software to your HMRC account, you must first sign up for Making Tax Digital (MTD)
There are four main steps to filing your first VAT return:
1. Sign Up for MTD - if you have already signed up for MTD click here to jump to section 3
2. Connect Business Finance to HMRC
3. Prepare your accounting for VAT return
4. Preview and File VAT Return
More about Making Tax Digital - Click here...
Section 1: Sign Up for MTD in 2 minutes
1. Sign up for Making Tax Digital if you have not done so already: https://www.gov.uk/log-in-register-hmrc-online-services
2. Sign in with Government Gateway ID
The GOV.UK website will ask your Government Gateway ID. If you don’t have one, you can click to create your sign in details. You will need to have certain information about your company handy to establish your Government Gateway ID.
3. Answer the multi-step questionnaire by entering and confirming details
4. Wait for an email
5. HMRC will email you within 72 hours to confirm you are ready to file your VAT returns
online.
Section 2: Connect Business Finance Assistant to HMRC in 4 steps
1. Connect Business Finance Assistant to HMRC
Go to VAT report screen . Click Connect to HMRC. Enter your VAT Registration number with no spaces, and click “Connect to HMRC now”
2. Click Continue
3. Enter User ID and password
4. Click Give permission
You will be redirected back to Business Finance Assistant.
Section 3: Prepare your accounting for VAT return
1. Invoices
Ensure that all Invoices are entered for the current VAT period.
2. Bank Sync
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 Transactions, or Upload bank statement.
3. Categorise transactions in each bank account
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 or press the 'Justify' button from within the expanded view to upload a photo of a receipt without creating an expense.
Click the 'Done' then 'Confirm' button alongside each transaction line to save.
Section 4: Preview and File VAT Return
1. Go to the VAT Return page to check the details of the VAT Preview
2. Ensure the correct range is selected. Click into the Collected and Deductible rates to see what is included.
3. Click the Preview VAT Return button in the VAT Return screen
4. Preview the details of box 1–9. Carefully read each disclaimer box on the right and tick them off when completed. If it’s not complete, click Cancel to go back and finish those tasks.
5. Once you’re ready, click “File with HMRC”.
When your return has been received, you will see the confirmation box above.
Please watch our video guide for more information about filing your VAT return: VIDEO - VAT RETURNS