Announcement: Removal of support for non-MTD VAT returns

Hi Tommy

https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat

Section 3.1 last paragraph:

You do not need to sign up for Making Tax Digital or apply for an exemption if either:

you’re already exempt from filing VAT Returns online "

Could we get some clarification for businesses who are and will be under the VAT threshold on April 2021?

Sorry for some reason it's not displaying the section above correctly.

3.1 You do not need to sign up for Making Tax Digital or apply for an exemption if either:

you’re already exempt from filing VAT Returns online your taxable turnover is below the VAT registration threshold

Hi Gregg,

We did receive communication from HMRC of the removal of XML VAT submissions from third party software by 7th April 2021. In this case, businesses can voluntarily move onto the new MTD system or alternatively, they could submit using the HMRC service available in their Business Tax Account, until they are mandated to join MTD from April 2022.

I hope this clarifies things!

Tommy

It appears it is not going to be possible for a business with sub VAT turnover threshold using ClearBooks for bookkeepping to use ClearBooks to file its VAT Returns, despite being charged for that functionality.

As HMRC are not mandating MTD for VAT until April 2022, it seems you are effectively imposing it a year earlier. Why?

Best wishes

Martin

Hi Martin,

Unfortunately, the date was decided by HMRC as per their email communication, please see:

'This means that from 8 April 2021, we will no longer be able to accept XML VAT submissions from third party software. If you have customers still using your XML products, they will need to find an alternative method of submission from April 2021. You may already have, or wish to develop, an MTD compatible product that they could move to. Alternatively, they could submit using the HMRC service available in their Business Tax Account, until they are mandated to join MTD from April 2022.'

I hope this clarifies things!

Tommy

So, I understand this to mean that your curent non-MTD filng is done by XML, which they are stopping one year ahead of their scheduled stop.

How lovely!

Thanks for clarifying

So the two choices are: - 1 create Return in ClearBooks, confirm and then file by manual input onto HMRC website 2 set up for MTD for any filing after 7 April 2021

Is that right?

Hi Martin,

No problem at all! And yes, that is correct.

Tommy

I operate Isle of Man businesses in clearbooks - we file VAT returns under a GB VAT code as the Isle of Man operates under an "common purse" agreement but we do not file to HMRC in the UK but to Customs and Excise in the Isle of Man which does not have electronic filings. Therefore we need to be able to continue to create manual VAT filings. In addition I also have a brand new company and wish to do its first VAT return but it will not let me because it insists that I go through MTD onbording, which I am obviously unable to do

Hi Kurt,

You can still run legacy VAT returns. First, you must ensure MTD is turned off by heading to Settings > Configure System > Toggle Features > VAT & Bank import tool > Untick MTD VAT Submissions. Once turned off, you can then head to Tax > VAT > VAT Return to generate your VAT figures to submit externally.

Please let me know if you have any further queries?

Tommy

Hi Tommy

We received HMRC's MTD confirmation email on Feb 11. Clearbooks is still showing status as 'pending'. Can you help?

Thanks

Hi Danielle,

This sounds like your authorisation has expired. I would advise heading to TAX > VAT > MTD Onboarding and then clicking on step 5. You can then deauthorise and reauthorise the account here with your government gateway. This should rectify the issue.

All the best,

Mohamed.

Hi, we'll still be using the VAT service on clearbooks and submitting our returns manually. I've noticed your VAT returns aren't reflective of HMRC's revised returns from 1st of Jan.

Can you advise if you will be updating Clearbooks to accurately reflect the new VAT return format (Box 8 springs to mind)

Thanks

Hi Mohamed, I should have mentioned that I already tried that and waited 72 hours for ‘activations’ - still says pending. Thanks

Hi Danielle,

I would then advise speaking to HMRC as this is a HMRC error at this stage.

All the best,

Mohamed.

Thanks Mohamed. I tried de-authorising and re-authorising again and it worked! Thanks so much for your help.

Hi Danielle,

You're very welcome.

All the best,

Mohamed.

Tommy - the MTD function is switched off in settings as you define but the only option that I get under the VAT menu item is "MTD Onboarding"