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Submitting Your VAT Return with Business Finance Assistant (MTD-Ready)

  • Updated

Since 1 April 2019, all VAT-registered businesses in the UK are required to submit their VAT returns online using HMRC's Making Tax Digital (MTD) service. Business Finance Assistant is fully compatible with MTD, allowing you to file your VAT returns directly.


Important Notes:

  • Use a Computer: Please use a computer, not a mobile device, to file your VAT return.

  • Regular Reconnection: HMRC requires you to reconnect your Business Finance Assistant account to your HMRC account every 18 months.

  • Starting Fresh: We recommend not importing historical transactions but starting afresh with a new quarter in Business Finance Assistant. Note that VAT returns from over 366 days ago cannot be filed with Business Finance Assistant.

  • Automatic Enrollment: HMRC will automatically sign all businesses up for Making Tax Digital for VAT unless they are exempt or have applied for exemption.


Steps to File Your First VAT Return:

Section 1. Connect Business Finance to HMRC
Section 2. Prepare your accounting for the VAT return
Section 3. Preview and File VAT Return

 

Section 1: Connect Business Finance Assistant to HMRC


1. Connect Business Finance Assistant to HMRC

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  • Navigate to the VAT report screen in Business Finance Assistant.

  • Click on "Connect to HMRC."

  • Enter your VAT Registration Number 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 upon successful connection.

 

Section 2: Prepare Your Accounting for the VAT Return


1. Invoices:

  • Ensure that all invoices for the current VAT period are entered and marked as 'Paid'.

 

2. Bank Synchronisation:

  • Verify that all business bank accounts are synched with Business Finance Assistant up to the end of the VAT period.
  • If any transactions are missing, click the "Actions" button and select "Refresh / Sync    Transactions" or "Import bank statement."
  • Press the icon of the bell to view actionable items:

 

3. Categorise Transactions:

  • Assign the appropriate Customer/Supplier, Category, and VAT rate to any uncategorised transactions.
  • Use the 'Search' and 'Filter' tools to select multiple transactions and update VAT rates simultaneously.

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

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  • After making these updates, click "Done" and then "Confirm" for each transaction line to save your changes.

 

 

Section 3: Preview and File VAT Return

1. Go to the VAT Return page to review the VAT Preview.

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


3. Click the "Preview VAT Return" button.

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4. Review the details of boxes 1–9. Carefully read each disclaimer box on the right and tick them off when completed. If any section is incomplete, click "Cancel" to return and finish those tasks.

 

5. To make any adjustments, press "Adjust" and enter the reason for the adjustment.

6. Once you're ready, press "File with HMRC."

  • Upon successful submission, a confirmation box will appear.

 

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

 

 

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