BTCSoftware Making Tax Digital for VAT: How to avoid the Obligation Error
Date Published: May 22, 2019
Category: Making Tax Digital
Making Tax Digital has been live since April 2019, and yet businesses and individuals still don’t know what to do about it. For the first year, this will apply to companies with a turnover of £85,000, though you can sign up early if you want.
BTCSoftware Support findings
What we have found through the support of our Making Tax Digital solution BTCHub, is that people are not sure what steps to take to be MTD compliant. Some people will just buy an MTD solution, without any checks. We thought it would help people get live with MTD quicker if they followed the below steps:
- Purchase BTCHub or other MTD solution
- Familiarise yourself with the back office
- Once happy to submit, you can register for MTD through HMRC
- For businesses, you can do that through this link
- For Agents, you would need to register for an Agent Services Account through HMRC
- Link your individual clients to this account
- Then register each one for MTD
- This registration will take up to 72 hours and 7 days if you plan to pay via direct debit so be aware of these time frames
Working in the support team, our number one reported issue by businesses or Agents is:
This means that the Company/Individual name and/or VAT number aren’t on the MTD database. This is normally because they haven’t registered for MTD or have used the wrong details.
The solution we always recommend is to register for MTD using this link from HMRC. This will run through the registration process and allow you to sign up for MTD. In the case of Agents, you will need to make sure that your client is linked to your ASA and registered for Making Tax Digital.
The other solution would be that the company/individual details don’t match those on the MTD server. For example, J Bloggs & Co could be registered with HMRC, but I signed up to MTDfVAT with J Bloggs and Co. This means that the name is different and as such will throw up the error above.