A dream or a drama… how was Digital VAT for you?

Almost a month since the first major MTD for VAT quarterly deadline, we’ve spoken to many customers about their experiences – and it has been a mixed bag of feedback! For most of you, the 7th August cut-off passed relatively painlessly. Yet for others, it threw up some real challenges.


Collecting together some of your feedback on Digital VAT, below we have pulled together a brief overview of the key obstacles faced, together with a few pointers to help when the next quarter swings around.


11th hour filing


Leaving it late to hit a cut-off date is always a gamble and some latecomers tripped up. This was particularly a problem for those not leaving enough time to get to grips with the new process and filing requirements; they simply ran out of time to troubleshoot the problems. It also caught out those who pay HMRC by Direct Debit, the last day for which was 29th July.


Taxing sign-up


The general sign-up process proved unduly complicated, according to some customers contacting us. They struggled to navigate the new system, some users received 403 or 500 errors, and a few – confused by the arduous initial stages or error messages – even attempted to sign up again! The issue was compounded by HMRC being slow to process and confirm sign-ups. Our customer support team felt your pain, as queries about this continued into late July, just days away from the looming deadline.


Obligation obstacles


HMRC seemed to have an issue making filing obligations available for some, which meant that MTD-compliant software would not search for obligations based on a start and end date range and an obligation status. This resulted in an error 404 – obligations missing – being returned when users tried to retrieve obligations.


Forget about it!


As the August deadline approached, we heard reports from customers that HMRC had issued letters saying that if they had not already filed through the new process, to forget it, file using their original method, and try again next time. For the laggards or those suffering technical headaches, the last-minute reprieve must have been most welcome!


Where’s the receipt?


Sending crucial information into the ether and receiving no response is disconcerting – and we had lots of queries about the lack of emails from HMRC confirming receipt of submissions. It is understandable to be nervous about this when you are used to it after submitting other types of return. However, there are no email receipts with the new service; the software tells you the status of the obligation and acts as confirmation.


What lessons can we learn?

  • The obvious message is to work ahead of the deadline next time! Reduce the pressure where you can and leave yourself time to address any problems.
  • With regards to the errors arising for obligations, our latest Keytime update includes an informative message about the situation and directing users to contact HMRC where this error is returned.
  • For those worried about the absence of a receipt of submission, HMRC’s MTD newsletter stated that they were reminding customers that they can view a copy of the return in their Business Tax account, which hopefully gives some peace of mind! 
  • Consider the opportunities. Look at the time taken and how you fared with the first stagger – are there improvements that can be made? Check in with business customers who filed themselves – was it a step too far and do they want an accountant to take over?
  • Get more information from HMRC. You can sign up to attend Talking Points – agent seminars – by clicking here. Sign up to HMRC’s MTD update for agents – edition 9 of which can be viewed here


This summer has been a significant step forward along the lengthy road to MTD. HMRC reported that nearly one million businesses are in the service and have made over 900,000 VAT submissions. As of 7th August, 370,000 VAT registered businesses above the threshold in stagger 1 had signed up. A whopping 60,000 submissions were filed per day at peak times and 19 businesses even filed in the minute before midnight in a sprint to the finish line!


It is natural to have some struggles with a new process like the much-hyped Digital VAT, but hopefully those who felt some pain the first time around will be old hands by the next quarterly submission. The Keytime team is here to help you on your digital journey; and when it comes to MTD, no question is too daft nor too complex to ask – we will always support you where we can.