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HMRC VAT APIs fall over on deadline day

Regular grumbles from accountants about the functioning of HMRC’s Making Tax Digital for VAT program interfaces cropped up again on Tuesday as accountants were unable to file returns on the last day of the quarter.

8th Jan 2020
Editor in Chief (interim) AccountingWEB
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HMRC MTD VAT status alert, 7 Jan 2020
HMRC
HMRC MTD VAT status alert, 7 Jan 2020

Update, 9 January, 6pm: After further interruptions in digital services and MTD APIs on Wednesday and Thursday, an HMRC spokesperson commented: “All of our services are available and working.

“Over the last couple of days we encountered a few unrelated IT issues, and took some of our services offline as a routine precaution while we investigated further.

“Our IT teams always work hard to restore services as quickly as possible, especially during peak periods where we’re expecting increased demand. We are continuing to investigate with our IT partners to ensure similar issues do not arise again.”

On Wednesday, the department told AccountingWEB: “The vast majority of customers due to file their VAT returns by 7 January have already done so, therefore the customer impact of this short outage was minimal. For the small number of customers who were unable to file their VAT return yesterday we have extended the deadline to 9 January. Customers will not receive a penalty for filing their return today. We are sorry for any inconvenience this may have caused to anyone affected.”

AccountingWEB members SteLacca and Jennifer Adams raised the alarm on Any Answers at 10:34 on Tuesday 7 January – deadline day for people filing their quarterly returns for September-November. Other members including KetteringUK and biff1001 confirmed they’d experienced problems too, as did Simon Woodhams from Moore Kingston Smith on Twitter.

By 10:46, the tax department acknowledged the “elevated” API errors and was urgently looking into the issue (see image above).

At 2:06pm unofficial API monitor Si Woodhams announced on Twitter that the APIs were working properly again, urging accountants to “get those VAT returns filed”.

Woodhams has been grumbling about the VAT APIs on Twitter since early November. The problem he encountered at that point was that Xero VAT needs to have a live connection with HMRC API to work, so his team can’t do any work on VAT returns when that link falls over.

There have been other niggles in recent months.

Charlotte Gatton from Duncan & Toplis filed all her November returns by the close of play on Monday, partly because she experienced problems when trying to file a few last minute returns on 7 December.

Back in November, she arrived at Xerocon weighed down by concerned calls and texts from clients who had discovered unexpected VAT liabilities from their June returns. “Yesterday, they showed up as filed. Today, there’s an unfiled return with hefty outstanding penalties. Xero blamed HMRC and HMRC blamed Xero. I suspect it’ll sort itself out over the weekend and have been advising clients to sit tight,” she said at the time.

For Woodhams, Xero VAT’s API dependency is a continuing inconvenience. “We can’t prepare and show client a VAT return for approval. We have to create one, disconnect from the API and show it to them, then reconnect. It’s a mess. I’ve been raising it with them regularly. They say they’ll fix it, but not when.”

Echoing a sentiment that has been posted many times before on AccountingWEB, Woodhams commented on Twitter late on Tuesday that the omens were not good for the next phase of HMRC’s digital filing project: “It’s more than niggles at the moment - just wait until SA, CT etc all fall under MTD as well...”

Replies (31)

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
08th Jan 2020 12:49

Jan 8, 12:26 - "New incident: Investigating"

A few minutes ago I got an alert from HMRC's API status service: "We're experiencing an elevated level of API errors and are currently looking into the issue."

The initial response from HMRC is that they are not sure if today's incident and yesterday's are connected. They are investigating and promised to pass on their findings.

Update: Incident reported resolved at 13.52.

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Replying to John Stokdyk:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
08th Jan 2020 16:48

Today's loss of service affected other digital services and was unrelated to yesterday's MTD for VAT API errors, HMRC told us.

The spokesperson also said that people could have until tomorrow (9 Jan) to file their Sept-Nov VAT returns without incurring late filing penalties - another extension to the original 24hr relaxation.

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By Rebecca Cave
08th Jan 2020 13:36

If you have views about MTD for VAT and want to ensure that those views are heard by those who will make the decisions about MTD roll-out to other taxes, take part in this survey: https://www.surveymonkey.co.uk/r/VXBTDPD.
The CIOT and ATT are gathering data from thw survey until Monday 13 Janaury, which they will use to present the real story about MTD to HMRC.

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Replying to Rebecca Cave:
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By adamsmith72
08th Jan 2020 14:03

The only issue is they don't listen. They didn't even listen to the Select Committee.

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Replying to Rebecca Cave:
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By memyself-eye
10th Jan 2020 10:45

I completed the survey today. I was not complimentary.

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
08th Jan 2020 16:02

The issue with Xero's dependance on APIs has been addressed by Xero executive Tim Wright, who explained: "MTD VAT in Xero is a live ‘real time’ link with HMRC that requires an authorisation connection to HMRC. Xero supports authorisation for businesses and (for people part of a practice) agents. The authorisation is different for the 2 groups and aren’t shareable.

"We’ve been advised to only show the information HMRC provides via the API to people with authorisation. This means for someone to open a VAT return for review in Xero they need to have authorisation in place.
"We've discussed this area at length with HMRC as we know this is a point of frustration for you and we understand it's not how you’d like it to work. We don't want to cause you any inconvenience or hassle, however HMRC have been clear that they expect people to have their own authorisations, rather than shared logins which is how the previous HMRC VAT system worked.

"We do not plan to relax any authorisation requirements outside express agreement with HMRC.

Future plans:
"We’re looking into a VAT return review and authorisation process, which won’t require a MTD authorisation token as part of the process. The idea is that you whilst you will need a token to get and open a VAT return from HMRC, you will be able to issue a MTD VAT Return for review/approval by your client (hopefully with a signing capacity) so that it can then be submitted.

"This is part of our plans for the next calendar year (now being Oct 2019), and we’ll continue to listen to feedback to influence our plans."

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Replying to John Stokdyk:
SiWoodhams
By Si_Woodhams
08th Jan 2020 18:40

My question is - how are the other software vendors able to give you the Returns then? Even with the link being down/broken.....

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Replying to John Stokdyk:
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By c__m__h
08th Jan 2020 19:54

Hmm... not sure I quite agree with Xero's interpretation of having "authorisation" last time I checked it was something that a client granted to an agent and not to an individual employee of the agent... Xero certainly understand the concept of a practice and a practice user so I think it would be perfectly reasonable to argue if someone is 1) a practice user, 2) authorised to access the client in Xero, 3) also has rights to the VAT return section of that client and 4) that client's VAT number is linked to that practice's ASA and the practice has a 64-8 (or the equivalent) then that user would be deemed to meet the "authorised". I suspect the crux of it is this bit "MTD VAT in Xero is a live ‘real time’ link" and they simply haven't written it to do anything else like keep a cached copy of the information "locally" and are now trying to justify it on the basis of "security" as who can really argue about that - after all what are we really talking about here? A list of open/available VAT periods that HMRC have "issued" a virtual VAT100 form.

Thinking back to the start of the whole MTD and move to ASA process as far as I know HMRC basically said "we know our existing client delegation to staff function sucks so badly its basically unworkable for pretty much everyone with more than the smallest of list of clients to deal with so pretty much everyone else uses shared logins at office or agent level. A better approach is we will move to a very minimal web presence for agents, link everything at a practice level to a single really secure centrally managed identity (the ASA) and then publish everything via an API accessible in Line of Business software and then let the practice software vendors deal with things like staff groups, client groups on the basis that they probably already have that set up to secure the client data, or at least filter in the LOB product or you might be able to leverage existing identity groups from things like an Active Directory or Azure"

It would be really interesting to know what changed; whether it came from the HMRC side, or was more the software industry refusing to play ball with what HMRC was hoping for and taking the view they shouldn't sort out the failing with the broken HMRC security model and be expected to pick up the bill, and shouldn't have to develop a agent and a non-agent authentication platform - and I suspect in some part as a matter of principle as MTD was basically a dirty word.

I have my suspicion is was perhaps the latter as the whole introduction of additional users for access to a practice's ASA seemed very rushed and an afterthought as if HMRC suddenly realised that their vision for a single central authorisation per product once every 18 months wasn't going to be delivered and by basically mandating the introduction of 2FA the fall back of anyone contemplating using a single login was utterly unviable alongside the move to a single practice wide ASA linked to the firm's UTR that could cover 10-15 office.

Whatever you might think of the rest of MTD around things like digital record keeping and digital data transfers between products a lot of what HMRC from a technical perspective said they wanted to do from what I can see was fairly sound and well intended to deliver a business fit for the future and the world we live in today. What we seem to now have is a "toxic" product that so tainted the mere utterance of the letters M-T-D probably doom anything to failure, resistance and refusal - warranted or not.

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Replying to John Stokdyk:
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By johnt27
09th Jan 2020 09:23

Not sure I agree with Tim's comments here. We have delegated access to our ASA, with each member of staff having their own credentials. However, this causes massive issues for staff who share responsibility for VAT returns and constantly have to re-authorise the software if they log into a client on Xero after a previous colleague has done so.

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Replying to johnt27:
By Nick Graves
09th Jan 2020 10:13

So far, trying again tomorrow has avoided wasting my life on the phone.

MTD really is a pile of crap.

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Replying to johnt27:
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By c__m__h
09th Jan 2020 11:51

All I will say is this constant reauthentication is perhaps slightly more preferable that one of than Xero's earlier attempt at practice wide ASA token storage with no way of telling it to reauthenticate or "forget me" … lets just say we had a member of staff put in a client's Government Gateway credentials during the pilot and Xero was then attempting to access the MTD for VAT API for the entire practice using one clients details... and as the tokens themselves were "valid" just not authorised for other clients Xero wasn't forcing a reauthentication. Nearly 4 week later of escalations and blaming HMRC we finally managed to get Xero to strip out the required details and in the mean time their work around was for staff to sign up and be granted access with another email address (.com rather than .co.uk) so they weren't then seen as practice users.

To be fair part of this was probably not entirely 100% Xero's responsibility; they perhaps didn't expect someone to enter anything other than ASA credentials for a practice account - although perhaps they should have forsee it. That said we discovered in the process of this move to MTD one office we had taken over every single client our predecessors had setup to file VAT using "business" credentials rather than linking them to a agent account for VAT and the staff had blindly continued doing it that way knowing no different... and then we discovered one of them when prompted to setup 2FA on a number of these account has done so to their personal mobile... and then left the firm!

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By Angela Spencer
09th Jan 2020 10:18

The problems with HMRC's API compounded an issue which had already been created when Quickbooks Online's systems failed on Monday afternoon. From lunchtime on Monday it had been impossible to login to Quickbooks, which just gave gateway errors. When I tried to login at 8:00pm on Monday evening Intuit had closed Quickbooks down altogether.
Hence I was already playing catch-up on Tuesday morning when I was able to access Quickbooks, to find that HMRC MTD was then down!

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By rmillaree
09th Jan 2020 10:31

What the hmrc probably fail to realise is that with the online software as it is - it's often not even possible to generate the vat return to look at what the figures will be or see what may need amending when their systems go down. To gloss over this as a minor failure when a busoness can't carry on their necessary behind the scenes calculations is simply not acceptable. Have hmrc given this issue any though - probably not by their semi dismissal of the problem. If they want to quote actual true stats can they let us know what the most popular day for filing vat returns is - i think you will almost certainly find that the answer is the 7th of the month!

There is truth and hrmc highly paid anonymous spin that is worse than what a politician can chuck out at times.

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By Lachlan
09th Jan 2020 10:40

The representative additionally said that individuals could have until tomorrow (9 Jan) to record their Sept-Nov VAT returns without causing late documenting punishments - another expansion to the first 24hr unwinding.
https://www.mybkexperience.xyz/

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By Angela Spencer
09th Jan 2020 10:44

Is it just me, or is HMRC VAT service down right now ??

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Replying to Angela Spencer:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
09th Jan 2020 11:51

Unfortunately you are not mistaken, Angela.

There's an Any Answers thread up and running about the situation and we have put a call through to HMRC for an explanation.

Their reply for now was: "We are looking into this as a matter of urgency and will let you know when we can."

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By Ruth E Corkin
09th Jan 2020 11:13

This also happened on the last day for filing for the September quarter returns (more than 500 businesses couldn't file) and I also think that there were issues for the October period returns as well. For the September quarter there was also an issue for the Barclays payment service and with Xero. It doesn't bode well for the December quarter ends with the increased number of taxpayers filing due to the deferred group and also the increased number of payments being handled by Barclays for self-assessment and VAT at the end of January!
I also have clients that have not been able to access the file because of issues with the links between the Business Tax Account and the Agent Services Account and problems signing up. I have one client that will probably have to be manually filed by HMRC for the third quarter in a row because of sign up issues.
Before HMRC progresses to the digital links enforcement on taxpayers, it needs to get its own house in order and ensure that there is some certainty about filing VAT returns.

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By Helen Piper
09th Jan 2020 11:44

I have not been able to submit ANY VAT Returns from my Sage Accounts since MTD started in April 2019. Sage says its an HMRC problem, HMRC say its a Sage problem. I have to send the Sage backups to an associate who submits them from their PC. Sometimes they have to use the bridging software to get the Returns to submit, but there is no pattern to identify. There is obviously something wrong in my settings, but no-one can tell me what. I never had a problem submitting VAT Returns using the old system. Every time I try to submit and fail, I send the HMRC a screenshot of the page and they say they will be in touch. They never phone, but just send an email quoting a reference, but they don't say which company's VAT Return the response applies to, so worthless. When will we ever get competent people working at HMRC who can help us to fulfil our legal obligations?

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Replying to Helen Piper:
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By Ruth E Corkin
09th Jan 2020 12:22

I've had the same response from Xero when there are issues!

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By Cloudcounter
09th Jan 2020 11:56

They have experienced an "elevated level" of API errors. Does that mean that there is a normal level of API errors that they are happy with?

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Replying to Cloudcounter:
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By bendybod
09th Jan 2020 12:39

Probably!

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By AdShawBPR
09th Jan 2020 12:03

Xero's VAT process under MTD is truly awful. Fine to have a live link to HMRC when filing a return, but should be easy enough for anybody to view a VAT report showing what that report would show without a live link. It's just a report!!! I don't believe HMRC have stipulated this. If they have then it's making it more likely errors will occur when they say MTD has been introduced to reduce errors. Anybody wishing to add there comments or just vote for this as something for Xero to correct should go to this Xero discussion thread: https://community.xero.com/business/discussion/102050933/ and vote for a change.

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By bendybod
09th Jan 2020 12:41

I've just tried to file 2 December returns today through Sage with no luck.
I realise that HMRC's systems are notoriously shocking in January but the past three days have been awash with online services being unavailable or APIs being unavailable across the taxes.
And they want more 'customers' to interact electronically with them for more purposes. That's clearly going to end well.

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By Kaylee100
09th Jan 2020 13:14

I cannot file a VAT return currently (not the end of the world as its deadline is 7/02)

However, I also need to register someone for VAT this afternoon and cannot seem to get into my account currently - is it not working again?

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Replying to Kaylee100:
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By bendybod
09th Jan 2020 14:33

I can get in to online services currently, it is just the API that is not working. It is up and down like a yo-yo though so we're just having to keep trying periodically.

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Replying to bendybod:
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By Kaylee100
09th Jan 2020 19:44

Thanks.

I finally managed to file the return, and it says fulfilled BUT I wasnt asked for the usual authorisation code. So thats odd. Ill see if I can see the filing in my ASA tomorrow.

It was also working when the VAT registration client came in, so that was OK too.

Ive filed a few SA returns today too. Slow, but filed OK.

And while waiting I completed the survey!

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By John Wheeley
09th Jan 2020 14:38

I use Quickfile accounting software and MTD filing works perfectly.
Is it a Zero/Sage problem?

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By North East Accountant
10th Jan 2020 08:49

Perhaps the live link is Xero thinking ahead so that when all transaction data goes to HMRC in real time they are ready for it.

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By Bill H
16th Jan 2020 19:34

I am glad I have not yet signed my clients up for MTD! What a load of rubbish it is.Seems like Sage xero and quickbooks cannot handle it. I have not got the time to spend trying to file VAT returns through a failed system. Hopefully the Government will scrap it in the next budget. I wonder sometimes whether there were back handers from HMRC to the software companies to promote this garbage!

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Replying to Bill H:
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By bendybod
17th Jan 2020 11:40

It was online services as well at one point, so not the software.

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By Charlie Carne
17th Feb 2020 15:47

Quote:

unofficial API monitor Si Woodhams


I bet you were milk monitor at school, Si!
.
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