Making Tax Digital is an HM Revenue and Customs (HMRC) initiative designed to make sure the UK tax system is effective, efficient and simpler for VAT registered businesses. FreshBooks’ MTD portal allows you to submit your VAT Returns with the HMRC, as well as review past submissions, VAT liabilities and VAT payment history.
Once your VAT profile is configured and signed in with the Government Gateway, you can then submit returns to the HMRC directly using the below steps:
The below steps will allow you to connect with the Making Tax Digital app and set up your VAT profile with your Government Gateway login, if you haven't done so already:
Connect to Making Tax Digital
If you’re an accountant, you can access the MTD portal via the VAT Return Report instead. Otherwise, set up your connection to the MTD portal with these steps:
In your FreshBooks account, select the Apps section
Then in the FreshBooks MTD app, select the Install Now link
In the Connect to FreshBooks MTD window, select the Allow button to authorize FreshBooks MTD to access your FreshBooks account information
Proceed to the Configure your VAT Profile steps below to continue your setup.
Configure your VAT Profile
In the Making Tax Digital portal, next to Step 1, select the Configure your VAT Profile link
In Edit your VAT Profile, enter your VAT Number in the field provided
For your VAT Scheme, choose between Standard or Flat Rate (learn more about Flat Rate schemes here)
For Standard schemes, next to Accounting Method, choose between Cash or Accrual
For Flat Rate schemes, next to Flat Rate to use, specify the percentage rate
Then under Your HMRC Authorisation, select the Authorise Now link, a new browser window will open
Select Continue
In the new HMRC browser window, select the Continue button and then select the Sign into Government Gateway button
Enter your Government Gateway user ID and Password, or if you don’t have one, select the Create sign in details link instead
Select the Give permission button to finish setting up the connection
Once authorisation has been confirmed, close the HMRC window, return to your Making Tax Digital Portal and select Save Settings to finish setting up your VAT profile.
In the Making Tax Digital hub, if Step 1 and Step 2 is completed with green checkboxes, your MTD account is now set up and is ready to submit returns to HMRC directly:
Access Your MTD Account
To access your MTD account anytime after completing the setup, use the below steps:
In your FreshBooks account, select the Apps section
Under Connected Apps, next to FreshBooks MTD, select the Open App button. The app will open in a new browser window.
Select the Actions button to do any of the following:
Submit a Return - Upload your CSV and submit your VAT Return for your business to the HMRC directly
Past Submissions - View all your previously submitted VAT Returns and any responses from the HMRC
Liabilities - Access your current VAT liabilities
Payments - View your VAT payment history
Settings - View your VAT profile and your HMRC authorisation
Next to Reset authorisation, select Reset Now to disconnect your HMRC account from your MTD portal
Submit a Return
If you haven't filed a VAT Return, review VAT Return Calculations below first. To submit your VAT Return, use these steps:
In your FreshBooks account, select the Apps section
Under Connected Apps, next to FreshBooks MTD, select the Open App button, the app will open in a new browser window
If not logged into your MTD account, sign in
Select the Start a Submission button
Next to Period to file, choose a Period from the dropdown
Your VAT Return report will automatically be uploaded for you - confirm that your totals look correct
If needed, select the pencil icon next to any number to make adjustments to the total
In the Notes field, specify the reason for the adjustment entry
Next, add a positive or negative total in the Adjustment Amount field
If needed, select the + Add an Adjustment button to add additional adjustments
Select Save Adjustment to finish
Once you’re done reviewing your VAT Return, check off the box next to I confirm that this VAT period is finalised and includes all relevant transactions
Select the Submit button
A confirmation will appear, and you can find your recent submission in the Past Submissions section under the Actions button. Viewing past submissions will also include the View PDF and Print button to save your submission offline.
Notes on Adjustments:
Adjustments can be made for:
Capital purchases over£2,000 (including VAT) to reclaim VAT (Box 4 and Box 7 for Flat Rate scheme)
Late claims
Missing information from the current period such as income from other sources not captured in your General Ledger, sales and expenses made before you created your FreshBooks account, and anything else that was not captured properly in your FreshBooks account
Can I use this to file my personal income (SA100)?
The MTD portal is for VAT/corporation tax only. Personal income can be filed using one of our apps here instead.
Why are my past filings missing and the MTD portal is making me connect to the HMRC again?
To ensure your data is secure, the HMRC authorisation expires every 18 months. You can re-authorise again with the below steps:
In your FreshBooks account, select the Apps section
Under Connected Apps, next to FreshBooks MTD, select the Open App button, the app will open in a new browser window
Select Submit a Return
Then select Authorize with HMRC
In the new browser window on the HMRC website, select Continue button
Enter your Government Gateway User ID and Password then select Sign in
Then enter your Access Code and select Continue
Select the Grant authority button to finish. Your connection will be re-authorised again and past filings will show up again in your MTD Portal if there are any.