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What's up with MTD for VAT...

for VAT de-registered companies?

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Annoying tale...

New limited company client which registered for VAT from 1 June 2021. Records on Xero and registered for MTD for VAT via my agent portal. First VAT return for June to August 2021 due by 5 October 2021. So far so good.

Mid-September client informs me he is parking the company as his business partner got a job and wants to de-register for VAT. I did the de-registration and now need to do a "final" return for June to August and file by 5 November. This is where the problems start....

Xero won't file the VAT return, it returns an error.

I log in to my normal HMRC account, select the client under VAT, click file VAT return then log in again on my agent portal to file the return. I get a warning that there is no DD in place and tick the box to say I will inform my client, then fill in the VAT return on screen (yes we can do that again now without MTD compliant software....). Sadly, when I try to file it I get an error to say the service isn't working.

I inform the client that he needs to set up a DD via his tax account for the company but that fails. Client's home address was used when the VAT registration was done but he has since moved and not told me or HMRC. The post code for his old address doesn't work when he tries to add VAT to his tax account.....

A bit PO'd I start trying to work out what the problem is.... Is it that de-registering has also killed off the ability to file using MTD? Is it that HMRC have written to him at his old address confirming the de-registration, but the post was returned so its now flagged as a gone away trader or whatever they're called now? Is it just because MTD for VAT is stupid? Answers on a post card please.

All this aggro for a VAT bill of £45.12!!

 

Replies (8)

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By rmillaree
13th Oct 2021 15:42

I am a bit gobsmacked that if its an MTD signed up client (and you havent formally exited MTD) that you can see the vat return on screen - perhaps the vat office know something is not working here when vat de-registrations have beeen processed and allow submisions via that means perhap?

The only thing i could guess would be if you are too early that computer needs more time to link across - so perhaps try again in 48 hours. If its issue with Xero and agent login i cant belive the issue has anything to do with Xero systems.

I was was rather pleasantly surprised today when i contacted the vat helpline ref really old return that has dropped off the mtd system - got email there and then with spreadsheet to complete and email back to them - so you may be pleasantly surprised that if its a known glitch they may simply email you excel sheet to complete and send back by return .

One other option you may be able to try is to unregister from MTD if client is eligible- must admit i havent ever doen that for a client yet.

Note if you want to try your luck contacting the department that sent the excel vat return direct via email here is their email address

[email protected]

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Replying to rmillaree:
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By petestar1969
14th Oct 2021 10:32

I sent an email to them and got this response...

Thank you for contacting the Making Tax Digital Customer Support Team.

If you are having issues submitting a VAT return through third-party software or have questions relating to VAT, please contact the VAT helpline in the first instance:

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/v...

We are unable to authorise the use of a manual return through email. This must be discussed with a helpline adviser. Emails requesting the use of a manual return will not be actioned.

Please note that due to Data Protection Policy we are unable to provide advice regarding your VAT account.

If you have completed a VAT Manual Return template we will process this as soon as possible.

• Please accept this email as confirmation of receipt.

Thank you,

MTD Customer Support Team

The information in this e-mail and any attachments is confidential and may be subject to legal professional privilege. Unless you are the intended recipient or his/her representative you are not authorised to, and must not, read, copy, distribute, use or retain this message or any part of it. If you are not the intended recipient, please notify the sender immediately.

HM Revenue & Customs computer systems will be monitored and communications carried on them recorded, to secure the effective operation of the system and for lawful purposes.

The Commissioners for HM Revenue and Customs are not liable for any personal views of the sender.

This e-mail may have been intercepted and its information altered.

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Replying to rmillaree:
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By petestar1969
14th Oct 2021 15:59

I spoke to HMRC about this and they told me even if registered for MTD they allow the first VAT return (albeit this one was the last/final/only return) to be filed through the HMRC website.

They also told me, despite the error messages, that they had received the return, so anyway......

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By ireallyshouldknowthisbut
13th Oct 2021 16:32

meh, I would just write in.

And with any subsequent hassle from HMRC refer to your earlier letter.

I have got two clients for whom we never filed the final VAT return (I picked the same day for de-reg as the last return and it couldn't handle it) and nothing seems to have happened. Both have now been struck off.

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By Matrix
13th Oct 2021 17:56

I have filed the final VAT return from my ASA before and haven’t had a problem. They didn’t all have DDs.

When you go into the client can you see this (File a return) as an option?

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Replying to Matrix:
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By petestar1969
14th Oct 2021 10:18

Yes I can. We are agents for VAT so they appear on my agent client list. if I click file a return, it says they are registered for MTD so click below. I then have to sign in again to HMRC on my ASA account and the return pops up for me to fill in but it won't let me submit it.

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Replying to petestar1969:
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By Matrix
14th Oct 2021 12:45

You need to login to your ASA and not your old account. It shouldn't make any difference to what you did but give that a go. Put in the VAT number to bring up the client and you can see the options. I assume you had to deregister in this system but it also lets you file the final VAT return from here. I don't know why it wouldn't work, maybe it is because it is their first and last.

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Replying to Matrix:
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By petestar1969
14th Oct 2021 15:56

I spoke to HMRC VAT and despite the error messages, they told me they had received the return, go figure......

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