What is Making Tax Digital (MTD)?
FreshBooks is MTD compliant as of April 1, 2019 with our MTD Portal. Making Tax Digital is an HM Revenue & Customs (HMRC) initiative designed to make sure the UK tax system is effective, efficient and simpler for taxpayers. All VAT-registered businesses with a taxable turnover above £85,000 are required to keep digital financial records and send returns using MTD-compatible software as of April 1, 2019.
Our MTD Portal also maintains a digital link with your transactional history, and will continue to be acceptable to the HMRC after 2020.
- Getting Started
- VAT Return Report
- Create & Access Your MTD Account
- Register & Connect with HMRC
- Inside Your MTD Account
- Submit a Return
Wondering where to get started?
- Register for an account at our MTD Portal
- Authorise your MTD Portal with the HMRC
- Then you can submit your return.
VAT Return Report
To access your VAT Return Report, you can use the steps here.
Create & Access Your MTD Account
- Create an account at https://www.freshbooks.com/mtd
- If this is your first time, click on the Register link to create your MTD Account, otherwise, login with your existing username and password
- As a new user, set up your account information with the name of your FreshBooks Account and click Continue
- Then for your business, choose between Unincorporated / Self Employed or Incorporated
- Enter your Business Name and your VAT Number
- Click Finish! to complete the setup process. You can now use your email and password to log into your MTD Portal anytime at https://www.freshbooks.com/mtd.
Register & Connect to HMRC
Once you have created your MTD Portal login, you’ll be prompted to register for MTD if you haven’t already:
- Register for MTD
- When prompted, select Yes, I have accounting software and click Continue
- Then select Yes, my software submits through Making Tax Digital for VAT and click Continue
- Log in with your Government Gateway user ID and Password (or if you don’t have one, click on Create sign in details)
- Enter your Access code
- Enter your VAT number from your VAT registration certificate
- Complete the rest of your MTD registration
- You’ll then be sent a verification email - click on the link in the email to verify your email address
- Read and accept the terms of participation.
HMRC will then confirm within 24 hours if you can start submitting VAT Returns under MTD. If you’ve registered as a business, you can continue to use your existing Government Gateway user ID and password credentials. Agents must use the new credentials they created as part of the Agent Services Account setup.
Then authorise your MTD Portal with HMRC with these steps:
- Click on Your Account
- Then click on the HMRC sub-tab
- Click on Authorize with HMRC
- Then click on Continue
- Next, click on Grant authority
- You’ll see a new screen indicating your authorisation has been confirmed. Click Close this window to finish. Your MTD Portal is now ready to submit returns to HMRC directly.
Inside Your MTD Account
- Submit a Return - Upload your CSV and submit your return 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
- Account Settings
- About You - Update your Name, Email, Password, and FreshBooks Account name anytime
- HMRC - View your current HMRC authorisation and expiration date, as well as the option to renew it
- Security - Update your 2 Factor Authentication, Security Question and Security Answer
- Your Companies - This lists all your Companies and their VAT numbers, as well as their outstanding liabilities and when their next submission is due. Click on a Company Name to update its name or VAT Number
Submit a Return
To submit your MTD Return, use the below steps:
- Ensure you’ve enrolled in MTD first
- Then confirm your company is connected to HMRC
- Next, ensure you have the CSV provided from your FreshBooks account or from FreshBooks Support
- Inside your MTD Portal, click on Submit a Return under VAT Returns
- Click on the Submit a Return button
- Then click on Upload CSV and choose the CSV file from FreshBooks
- Confirm that your figures look correct and confirm the declaration
- Click Submit to finish.
You can find your recent submission appear in the Past Submissions section afterwards.
The full list of FAQs can be found here (after signing into your MTD Portal). Below are some common questions:
How do I change my email address or password associated with my MTD Portal?
- Once logged in, click on Your Account
- Ensure you’re on the About You tab
- Update your email or password as needed
- Click Save Settings to finish.
How come I haven’t received my confirmation email from the HMRC for enrolling in MTD yet?
It takes up to 72 hours to receive a confirmation email from the HMRC at this link for every business you enroll. Enrollment is handled by HMRC, and can be delayed or denied (especially for clients from abroad, with complex VAT accounts, or with severely overdue records). If it has been more than 72 hours, please contact the HMRC Online VAT Helpdesk for assistance with this issue, and to help you complete enrollment.
Why do I not see any obligation periods to file?
Ensure you’ve completed the following:
- You have enrolled in Making Tax Digital
- You have received a confirmation email from HMRC
- You have authorised the software with HMRC, using the same login details
- Your VAT Number matches the one HMRC holds for you
- You are using the correct login at the HMRC
Why are my obligation periods not matching? The first one is 6 months and after that they're 3 months long?
The obligation periods you are able to file are sent directly to your account from HMRC. We do not have any control over which periods they make available to you to be filed. If you have a question about the obligation periods, please contact the HMRC Online VAT Helpdesk directly.
I need to change my HMRC authorisation, how do I do this?
- Go to Your Account
- Click on HMRC
- Then click on the Renew now button to renew authorisation
- From here, you can now log into a different HMRC account.
I get the message “Invalid VRN”. What do I do next?
- Ensure your VAT number matches the one HMRC holds for you
- Use the steps above to re-authorise the business with the correct HMRC login
I get the message “HMRC Authentication error: NOT_FOUND”. What do I do next?
This can occur if your MTD Portal is unable to communicate with HMRC. Ensure you have done the following:
- Enrolled in MTD
- Received confirmation email from HMRC
If the issue still occurs, please contact the HMRC Online VAT Helpdesk as they have access to your VAT Record.
I’m trying to register the business but the last page of the HMRC website says "Experiencing technical difficulties, try again in a few minutes”. What do I do next?
- Occasionally HMRC services are unavailable - check availability here
- You can always contact the HMRC Online VAT Helpdesk if you need help enrolling sooner
I’ve made a mistake on my submission, or I’ve submitted the wrong period - how do I fix this? Or can I submit again?
Submitting a period is permanent once completed (and any period submitted a second time will be rejected by the HMRC with an error message indicating this period has already been submitted). If there is incorrect information on your submission, or you’ve submitted the wrong period, contact the HMRC Online VAT Helpdesk who can help with submitting corrections, making corrections on your behalf, or adjusting your account.
How do I submit supporting documentation?
You will not need to submit any supporting documentation to the HMRC. You just need to maintain a digital record of your transaction history (such as your FreshBook account) to show to HMRC if ever they require it.