Signing up clients to MTD for VAT

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Now the MTD for VAT pilot is open to a large number of VAT-registered businesses, you need to know how to sign up clients for MTD, and what the client has to do.     

Agile confusion

MTD is a steep learning curve for everyone involved: software providers, tax agents, businesses and the HMRC staff. There is no MTD reference manual, so we are all feeling our way along.

What makes life more difficult is that the MTD project is being developed using the “agile model”, which encourages a rapid and flexible response to change. This means the MTD processes are still being tweaked, which is leading to confusion as conflicting messages are distributed by HMRC, the software developers and the professional bodies.

Sign-up process

The latest confusion surrounds the processes needed to sign up a client to MTD for VAT. Back in June 2018, we were told that clients would have to access their Business Tax Account (BTA) in order to sign up to MTD for VAT, and HMRC has reiterated this message in its webinars.

HMRC has now clarified that an existing client of a tax agent won’t need to access their BTA, as the agent can sign them up for MTD for VAT. The process will work like this:

1. Set up your Agent Services Account (ASA).

2. Link your MTD software to your ASA.

3. Link your list of clients to ASA via your government gateway.

4. Signs up clients through MTD software, to MTD for VAT.

Let’s look at each of those steps in more detail to tease out the pitfalls.

Step 1: Set up your ASA

The key to operating MTD as a tax agent is your ASA. This needs to be set up before you can file anything for your clients under MTD. The process of getting an ASA may not appear logical. As MTD is a new tax filing system, which will run in parallel to the current filing system, the existing login functions are duplicated.

Have the user ID and government gateway password you normally use to sign in to HMRC online services as an agent to hand and be ready to note down a new reference number. You also need the UTR number for your business and the postcode associated with that UTR number. Only one ASA can be set up for each legal entity as it is tied to the UTR number for your business.

Follow the steps on the gov.uk page: Get an agent services account. John Stokdyk’s article on how to set up agent services gives you a preview of the pages you will see at each stage.

As part of this process, you will get a brand new government gateway user ID and password. Keep this separate as it will only be used for MTD. Do not mix it up with your old government gateway credentials as you still need those for dealing with non-MTD tax returns.

Step 2: Activate MTD-enabled software

You can’t go any further without your MTD-enabled software, so talk to your software provider. You need to link your shiny new ASA to your MTD-software, and that can only be done from within your MTD software.

Step 3: Link clients to your ASA

This is done from within your ASA. Note this step does not sign up clients to MTD, it only links them to your ASA, through which will manage the MTD filings.

To get into your ASA you need to use the new MTD government gateway login page, not the old government gateway you use for your non-MTD work. These two login pages look identical but they go to different places in the HMRC system – thanks to practice owner and AccountingWEB member Chris Maslin for finding this out the hard way and sharing his experience with me.

If you have several government gateway accounts for your firm, perhaps one for each office, this linking process must be performed for each government gateway account.

You will NOT see a list of the clients you have linked to your ASA, as this information is only displayed by your MTD software. If you plan to use several different MTD-enabled software products to suit different clients, this will cause you an administration headache.

At present, it is only possible to link clients that have authorised you to act using the online authorisation process. It is not yet known how clients that authorised you to act using the paper 64-8 process will be linked into the ASA.

Step 4: Sign up clients to MTD for VAT

Do not sign up clients for MTD for VAT until they are totally ready to file under MTD, as once signed up you can’t easily go back and file VAT returns under the old system for that client. It may be possible to opt out of the MTD pilot, but how that may be achieved is not clear yet.

At this stage, you need to do this sign-up process client by client, although when MTD for VAT comes out of the pilot stage your software may allow you to sign up a whole list of clients in one go. 

There are two ways for the client to get into the MTD for VAT pilot:

1. Do it themselves using this link.

2. The agent signs them up using this link.

You need each client’s VAT number to hand. You also need to supply an email address for the client. HMRC will then email the client a link and the client must click on that link to verify the email address. This means the client must have a functioning email address and must agree to paperless notifications for VAT from HMRC, in order to sign-up for MTD.

Once within the MTD regime, the client will have to access their BTA to see notifications to file and provide a view of their VAT returns. Although your MTD-software will provide that information, so if the client trusts you to handle all the VAT admin, they won’t need to access their BTA.

In the future, new clients will need to authorise an accountant to act for them through the BTA.

About Rebecca Cave

Consulting tax editor for Accountingweb.co.uk. I also co-author several annual tax books for Bloomsbury Professional and write newsletters for other publishers.

Replies

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10th Dec 2018 10:36

In the future, new clients will need to authorise an accountant to act for them through the BTA.

This is where it fails.

The troubles I have trying to get authorisation codes sent out for partnerships and limited companies..HMRC comes back 'failed' so often it's unreal.

Most clients don't know what a BTA is, and have no wish to know. Does it help them generate profits or run the business? No.

Stupidly complicated system. All they needed to do was link my current list of VAT Return clients on my agent portal to MTD and away we'd go. But no. Let's make it complex and obscure. Let's make agents set up a new account (that doesn't work, uses a different sign in page, and is generally annoying).

I hope the new system generates notices to file to agents as well as the client..clients aren't that good at forwarding these...

What an utter mess of a system - designed by committee, with no thought or input from those who will have to sort through the mess.

And who thinks this is a good idea:

You will NOT see a list of the clients you have linked to your ASA, as this information is only displayed by your MTD software. If you plan to use several different MTD-enabled software products to suit different clients, this will cause you an administration headache.

At present, it is only possible to link clients that have authorised you to act using the online authorisation process. It is not yet known how clients that authorised you to act using the paper 64-8 process will be linked into the ASA.

What's the point of having the ASA if you can't see the most basic of information, IE WHAT CLIENTS ARE THERE?

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10th Dec 2018 11:24

I can't even get started . . . . computer says "There is a problem. We could not find any records that match the details you entered.".
Gah!
What is it about HMRC tech projects???

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10th Dec 2018 12:22

Firstly, thank you, Rebecca, for an extremely clear list of the procedures required. I, too, found this out the hard way over the past few months and was relieved to discover only recently that existing clients do not need a BTA. I was not aware that HMRC distinguished between clients with online authorisation vs paper 64-8 forms, so that is an additional level of unnecessary complexity that HMRC should have solved before launching the pilot for MTD.

I would echo your comments about not signing up clients for MTD before they need to be, unless you are very confident in the processes and have the time to fix the inevitable bugs that arise for early adopters of any new system. It is important to note that, once you sign up a client for MTD, you MUST file via their subsequent VAT returns MTD. If you sign up earlier than mandated, or if you sign up a client whose turnover is below the mandated threshold, you will still need to file under MTD, as HMRC will not accept a non-MTD VAT return via the old portal for a client who has signed up for MTD. Claiming that they didn’t need to sign up, as turnover is low or that you signed up before April, does not excuse you; once you opt in, you are in!

I would also comment on Ian McTernan’s points. I agree with Ian’s comment about the difficulty of getting clients to use a BTA. I am considering creating unique email addresses for each of my clients’ BTA (eg [email protected]) and have those addresses forward inbound emails to both my client (to satisfy HMRC’s requirement that clients must have access to all communications sent to them) and to my firm. In that way, we get to see everything that HMRC send our clients and we can act upon it, as our clients probably won’t (as they will assume that we know about it, which we won’t unless we create a system like this to get copies). HMRC could have set up their communications such that ALL emails sent to clients were automatically copied to the appointed agent, but they haven’t done that, so we need some sort of process to ensure that we are not kept out of the loop.

As for Ian’s comment on the necessity for HMRC to create a new system, I disagree with him. This was necessary, as their old systems were not fit for purpose and did not allow agents and clients to access the same database, nor were they built to accommodate the necessary API’s to allow third party software to access the data. I do agree with him that it seems very odd that the new Agent Services Account does not display a client list and that one can only see that via third party software.

In summary, I applaud HMRC’s desire to move to a new system that will allow third party access to data (as commercial software companies will always give us much better reporting than HMRC can offer us). It is also much better that the new database will provide clients and agents with access to the same data (just look at the existing systems for PAYE, where the agent, the client and HMRC themselves all get different data, potentially showing three different sums owing to HMRC!). However, the complexity of creating a new Agent Services Account and the ambiguity of the questions posed during the set-up process (I seemed to have set up three ASA’s some months ago before I realised that one of the questions it asked me didn’t mean what it said) have been appallingly managed by HMRC.

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10th Dec 2018 13:59

Thanks for your article, I will file that away until June time, I wonder how much will have changed in the next 6 months.

it is helpful that HMRC no longer require a BTA as it has no real purpose for most clients with agents, the penetration of those must be fairly low.

it seems to be once again that "agile" is being used an excuse for "half baked" and "not properly thought out" and us agents bare the brunt of "defucking" HMRC's poor systems.

I wonder what happens for clients who switch agents are are in MTD, or for those who are a new business. How do they access it without a BTA? Do remember not everyone can get one of those set up.

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to ireallyshouldknowthisbut
10th Dec 2018 14:11

HMRC have said that only clients for whom you already hold electronic authorisation can be moved into the new ASA without a BTA. To bring new clients into your ASA, we are told that the new authorisation process will require those clients to access their BTA. We have not yet been told whether, after MTD implementation next April, we will be able to add new clients into the old portal (without a BTA) and then re-import them into the ASA, nor whether a client who is already in MTD can be imported into the old portal (when switching agents), let alone then re-imported into the ASA.

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10th Dec 2018 14:56

I'm a little confused. What of those who will simply use a bridging solution, which is effectively a glorified spreadsheet. How will that display our client list?

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to SteLacca
10th Dec 2018 15:19

It probably won't.

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to SteLacca
10th Dec 2018 18:42

I think the taxcalc bridging software would have a client list, from the way its set up.

Moreover if Rebecca is right and you must chose ONE product, then anyone on fully integrated packages that the software co's have been flogging, wont be able to file using them. We will have to type out the numbers into as spreadsheet, import them into the bridging, file, and not tell teacher what naughty children we are for typing a couple of numbers. Sorry. I mean export the numbers and re-import them. Of course I do.

I cant think there are many practices with 100% penetration of one type of software unless they force all clients on a "my way or the highway" approach.

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10th Dec 2018 17:18

Why have they made this so difficult for accountants, do they not want us involved?

We have clients using quickbooks, zero, freeagent, etc and we do the actual filing after they have done the entries (and we correct), now this

"If you plan to use several different MTD-enabled software products to suit different clients, this will cause you an administration headache"

I can imagine most accountants fall under this.

As to why we cannot see a list on the HMRC website, it's just bonkers.

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10th Dec 2018 17:29

Words fail me. Im getting more and more fed up with each blog. What do you all forecast will happen in June next year ?

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10th Dec 2018 18:03

I forecast chaos, chaos and more chaos. It is the most ridiculous, difficult and complicated system that could be dreamt up.

And to think that the Irish Border and the customs regulations are going to be satisfied by an HMRC-led system. Gawd help the trade and business of this country.

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10th Dec 2018 18:02

Duplicate

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10th Dec 2018 18:02

Duplicate

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to rockallj
10th Dec 2018 19:35

There are a number of ways accountants can assist their clients with MTD.

One is for the clients to electronically transmit information to the accountants and for the accountants to transmit that information to HMRC via some form of system.

Similar to this is the accountants or bookkeepers simply keeping all of the records and using an MTD system to submit that to HMRC.

Another is for accountants to do a deal with an MTD provider whereby the accountants provide the MTD interface to their clients (for a fee) and provide the professional advice to ensure that the clients are doing all of the digital links. In this situation the clients actually handle the submission.

Another is to leave the clients to arrange their own MTD facility or for those using cloud accounting to get them to have a system which is MTD compliant.

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to johnhemming
10th Dec 2018 19:49

How would you suggest we train clients in the age group 50 plus who are not educated with computers to keep records that comply with MTD for VAT and other taxes to come.
I know you are going to say spreadsheets and bridging software is the answer at the moment. I can assure you no client I deal with would use a spreadsheet and no way would they be able to allocate enough to produce a profit report ( this is the long term objective of HMRC ).
What is easy is a book with in and out that you can sit with anywhere and use a pen to list down what is required - you can then look over it in seconds and see errors and easily add it up. This is far better than using awful badly designed slow offerings that the IT companies seem to think works for clients. I think the IT people feel that everyone in business is educated on computers and understands double entry , they also think taxpayers have the patience of a saint.

Thanks (3)
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to johnhemming
10th Dec 2018 19:50

How would you suggest we train clients in the age group 50 plus who are not educated with computers to keep records that comply with MTD for VAT and other taxes to come.
I know you are going to say spreadsheets and bridging software is the answer at the moment. I can assure you no client I deal with would use a spreadsheet and no way would they be able to allocate enough to produce a profit report ( this is the long term objective of HMRC ).
What is easy is a book with in and out that you can sit with anywhere and use a pen to list down what is required - you can then look over it in seconds and see errors and easily add it up. This is far better than using awful badly designed slow offerings that the IT companies seem to think works for clients. I think the IT people feel that everyone in business is educated on computers and understands double entry , they also think taxpayers have the patience of a saint.

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to GHarr497688
10th Dec 2018 20:33

GHarr497688 wrote:

How would you suggest we train clients in the age group 50 plus who are not educated with computers to keep records that comply with MTD for VAT and other taxes to come.


What I am talking about is what some people are doing and what some of the technological options are. I am myself over 50 and I don't think there is a barrier that prevents people who are over 50 from using technology.

HMRC do have some exceptions for age, but I don't think they will draw the line at 50.

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to johnhemming
10th Dec 2018 20:48

Its not just IT you need to understand , its also Accountancy programmes. I think I am well placed to judge with 100 clients over 50 and all saying the same thing with no encouragement from me.

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to GHarr497688
11th Dec 2018 08:08

I'm 54, a trained computer programmer, a daily computer user (personally and professionally, using both Windows and Linux), amateur 3D Gfx artist, and specialist tax accountant.

Please don't assume that all people over the age of 50 are prehistoric Luddites.

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By NewACA
13th Dec 2018 09:20

Rebbecca Cave, is there a time lag between linking your clients to your ASA account, and being able to set them up for MTD on your chosen software?

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08th Jan 2019 17:46

Please can you help me, I am struggling here but I think my problems are easily fixed.
1) I have an ASA - do I need to ask for VAT services because at the moment I don't have any services
2) Historically each client had his own gateway for VAT (even though we use it to submit their returns) so I have been bringing them into my agent log in - and I have asked the ASA account to link them all. If I bring more clients into my agent log in will the ASA continue to link them? Or do I need to go and get them linked again (as you say it doesnt show on the ASA which clients are linked)
3) I am lost on how to sign up the client for MTD - when I log into their own gateway I can do this (there is a link) but not through my agent gateway

Thank you
Ian

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