Step by Step Guide to Making Tax Digital (MTD) : HMRC sign up

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Signing up to MTD is not Wolters Kluwer’s responsibility, however, we recognise that this can sometimes be a difficult process to follow and therefore we have created this user guide to help you.

Before you begin

Please note: signing up to MTD is not Wolters Kluwer’s responsibility, however, we recognise that this can sometimes be a difficult process to follow and therefore we have created this user guide to help you.

This user guide is based on various sources of information provided by HMRC along with links to their website. If you get stuck or need assistance through any part of this process, please contact HMRC in the help and support section of this guide.

Agents need to create an Agent services account which provides the agent with the log in details required to access the VAT APIs. Agents will also need to use the 'link existing clients' service' if you want to submit for a client whom you have an existing relationship within VAT.
Businesses submitting their own VAT returns only need to complete section 2 'Business Process'.
They can do this using existing Government Gateway (GG) ID if they have one OR they can set up a new one.
Be prepared - once signed up to MTD, returns MUST be submitted using MTD compatible software, don't sign up unless you are ready.
Where a business pays by Direct Debit an email address must be provided.
A business that pays by Direct Debit must sign up at least 15 working days before they need to submit.

Important: The role of the Business Tax Account (BTA)

Once a business is signed up to MTD, the BTA will be used to send them notifications to file and provide a view of their VAT returns.

A business does not have to set up a BTA for an agent to link clients to the new ASA.
A business does not have to set up a BTA to be signed up to MTD by an agent (the journey only requires them to validate an email address).
A business does need to have a BTA set up to authorise a new agent relationship.

Agents Process

Create an agent services account (ASA)

To access VAT (MTD), an agent must create an agent services account. This is a one-off process.

Agent signs in with existing Government Gateway agent user ID and password
Agent identifies their business with its Self-Assessment Unique Taxpayer Reference (SA UTR) or Corporation Tax Reference (CTR) and associated postcode
Agent gives some further details
HMRC creates a new Government Gateway account for the agent, and gives them their user ID
Agent checks details
HMRC creates the agent services account, and gives the agent their agent services account reference number
This service is available on GOV.UK at www.gov.uk/guidance/get-an-hmrc-agent-services-account.

Link existing VAT clients to your agent services account

You will need to link clients to your agent services account so you can send VAT Returns and Income Tax updates. You can link your clients or add new ones. After an agent creates an agent services account, they link their existing VAT clients to the account. Your existing clients will already be linked to your HMRC online services for agents account.

Agent signs in to their agent services account
Agent requests to link existing clients
Agent signs in with their existing Government Gateway user ID
HMRC links the clients from the existing user ID to the agent services account
Agent repeats the process with next Government Gateway user ID that has existing clients until all clients are linked. For example, if an agent currently has ten Government Gateway user IDs they must do this ten times

Link clients to your agent services account

Link new clients

After an agent creates an agent services account, they must link any new clients to the account one by one.

Agent signs into agent services account
Agent requests to ask a client to authorise them
Agent gives client’s details, including their VAT registration number (VRN) and VAT registration date
Agent gets a unique link and sends it to their client in email
Client receives email from agent and clicks on the link to begin the process
Client logs in with Government Gateway account and completes identity checks
Client confirms authorisation for agent to represent them

Register for VAT

This does not apply for businesses or clients who are already VAT registered and have a VAT Registration Number (VRN).

Post April 2019 HMRC will deliver a VAT Registration service that will allow businesses new to VAT to subscribe at the same time as they sign up to VAT (MTD).

Until this service is delivered, new businesses will need to register for VAT using the existing service, then navigate to the VAT (MTD) sign up service and complete that journey. The service will request information about the business and the person running it. Following successful registration the business will be informed of their VAT Return deadlines.

Agents must already be subscribed to HMRC agent services in order to access the new VAT registration service on behalf of their clients.

Agent signs up client for VAT (MTD)

Once an agent has linked a client to their agent services account, they can sign them up for VAT (MTD).

Agent signs in to agent services account
Agent gives client’s details, including VRN, business type and other type-specific details
Agent gives and verifies their own email address (once only)
Agent signs up client to receive secure messages
Agent gives client’s email address to HMRC
Client receives verification email and verifies their email address
Agent agrees to terms of participation for self and client
Agent waits 72 hours to see if client is approved to sign up

Note: Agents do not need to wait for client email verification before proceeding to agree the terms of participation.

HMRC have supporting content that allows a business to identify whether they need to:

Check if and when your client will have to join Making Tax Digital for VAT

Link software to HMRC

You must delegate authority to the MTD compatible software, if filing returns using CCH OneClick please refer to the Making Tax Digital for VAT quick start guide

Note: once signed up, returns must be submitted using MTD Compatible software. You cannot use the previous channel.

Business Process

Business registers for VAT

Before businesses can submit VAT Returns, they must sign up for VAT (MTD) and set up their software.

Business signs in to Government Gateway account
If the account is already enrolled for VAT, business confirms VRN
If the account is not already enrolled for VAT, business enters VRN and other VAT information
HMRC confirms that business is eligible for VAT (MTD)
Business gives HMRC its business type and other business information
Business agrees to receive emails and gives and verifies its email address
Business agrees to the terms of participation
Business waits 72 hours to see if it is approved to sign up

Link software to HMRC

You must delegate authority to the MTD compatible software, if filing returns through CCH OneClick please refer to section 3 of the Making Tax Digital for VAT quick start guide

Note: once signed up, returns must be submitted using MTD Compatible software. You cannot use the previous channel.

Help and support for Making Tax Digital Pilot for VAT

Watch webinars and videos for help with using software to send Income Tax updates and VAT Returns to HMRC if you’re an agent or a business. https://www.gov.uk/guidance/help-and.or-making-tax-digital

How does Making Tax Digital for VAT affect you? -This video explains how Making Tax Digital for VAT will affect your business. From April 2019, Making Tax Digital for VAT will be mandatory for over 1 million VAT registered businesses.
Digital record keeping for VAT - This video explains what digital record keeping means as part of Making Tax Digital for VAT. Businesses are required to keep digital records as part of Making Tax Digital for VAT.