Making Tax Digital
Important Notices
02/12/2020
Please be aware HMRC have started migrating customers to a new numbering system for the Period Keys they use. Presently this can mean that you will see two of the same period in your Obligations dialog as Khaos Control will have received earlier versions of period keys for the same period which has now been given a new number:
One in the form NNNN and one in the form NNAA, e.g.
- 1234 (OLD FORMAT)
- 12AZ (NEW FORMAT)
- 1234 (OLD FORMAT)
If you do encounter two obligations for the same period, you should always select the period which is in the form NNAA otherwise you will encounter a "Invalid Period Key" error returned from HMRC.
OAuth Token Refresh
If you change your password or your details, this will invalidate the token held in Khaos Control for your MTD functionality. If you have issues with the token, you will need to remove the token in [ System Data | Others | OAuth Tokens ] as this would force Khaos Control to re-authenticate on the next attempt.
Signing up for MTD
Important message from HMRC: businesses should not sign up to MTD until they have filed their last return through the old xml route. This is because sign up migrates their record to our new MTD system and closes off the xml channel. If you are in any doubt, please contact HMRC for clarification. Please see our common errors section for more information.
The links for Businesses and Agents have been updated to reflect the latest advice pages from HMRC passed on to us in their April newsletter.
Useful Links
HMRC MTD Service Availability and Issues
Guidance from HMRC about MTD submission by software
Information on HMRC Errors reported back to Khaos Control
Overview of Making Tax Digital
Making Tax Digital, or MTD for short, is an initiative by HMRC to make the tax return process more efficient and reduce errors. It means that for VAT registered businesses above the threshold of £85K a year, digital records need to be kept and VAT returns submitted using compatible software (or through the HMRC website itself). The initiative comes into effect on 2nd April 2019 for those meeting the criteria read more about the MTD here.
Khaos Control is registered with HMRC as compatible software for MTD and we are listed on their website here:registered software suppliers.
Back in February (04/02/2019) we completed the first live submission and have released version 8.163.11+ of Khaos Control with the new Digital Submission HMRC integration to all customers.You will not be able to submit your VAT return electronically to HMRC directly with an earlier version of Khaos Control.
HMRC currently still have some restrictions to whom can sign up to the Submission through Software scheme. If you pay by Direct Debit you cannot sign up if you are within 15 days of your next submission/payment or in the 5 days after a payment. We know that deadline for MTD can differ depending upon your business circumstances and your VAT periods, as such we recommend all businesses talk to HMRC to confirm their individual circumstances and needs are met appropriately regarding when would be the best time to sign up for the scheme.
All customers have received an update suitable for MTD, if you have any questions regarding your update please contact our support team via Phone or Email.
If you have any questions not answered here, please contact our training team and these pages will be updated with any new relevant information.
Signing up
The HMRC sign up process does take up to 72 hours for them to complete, once signed up you must use software to submit your next VAT return. If in any doubt, please do not sign up until your accounts department have discussed this with HMRC directly.
There are two sign-up pages depending upon whether you submit directly, or through an agent.
- If you do this direct, this is the most common sign-up we are expecting for Khaos Control users: Submit your VAT Return
- If you use an Agent who will have access to Khaos Control: Using Agents to submit VAT Returns
Here is some additional information if involving an Agent. If you have any queries about this, please talk to the HMRC directly as they are best placed to answer any queries regarding their systems and which account/login is appropriate to use information.
Agents
If you use an Agent to handle your Vat submissions presently and they have access to Khaos Control, they can use their Agent ID to sign up for the process, otherwise it would be your business HMRC Gateway ID, however we highly recommend checking with the HMRC directly on this part as it does depend on how you do this and this is not something we can answer for you.
The Making Tax Digital Process
There are a couple of steps required to use MTD; connecting to HMRC and authenticating, once this is achieved then you can process your VAT Return, see Connecting to HMRC and Processing a VAT Return. For information about error messages that you may encounter please see Making Tax Digital - A Guide to Error Messages.
VAT Groups
Customers who are part of a VAT Group will require separate Bridging software to complete their submission to HMRC. Khaos Control only supports direct submissions for self-contained single systems.
Ahead of the HMRC October 2019 deadline for VAT Group companies, suitable export facilities will be introduced to enable the use of external Bridging Software submissions where a Khaos Control system is part of a VAT Group company. Further details of this mechanism will be released when this work has been completed.
Common Issues
Different Trading and Company Names
If you have different trade or brand names you might find that when using MTD that the data migration might include both the company name and trading name. Previously you will have had VAT return details appear in your usual company name. However, when you submit your latest vat return using Khaos Control, your information might appear with a different company name, i.e. a brand or trading name. If you find that the name on your VAT submission is not correct, for example:
- Full company name is : MYCOMPANY LIMITED
- Full company name is appearing on the "change business details" non-agent page : MYCOMPANY LIMITED MYBRAND UK
- Company as displayed on the tax submission details page : MYBRAND UK
- Full company name is appearing on the "change business details" non-agent page : MYCOMPANY LIMITED MYBRAND UK
- Full company name is : MYCOMPANY LIMITED
please report this to the VAT Online Helpdesk.
Submitting through Khaos Control prematurely
For your first submission for MTD we recommend contacting HMRC to check your circumstances before you sign up. As per our important note at the top of this page, HMRC have advised us that businesses should not sign up to MTD until they have filed their last return through the old xml route. This is because sign up migrates your record to the new MTD system and closes off the xml channel. Please contact HMRC for clarification. We have had customers attempt to do this and when doing so received an error message 403: CLIENT_OR_AGENT_NOT_AUTHORISED. If you do encounter this error, please follow the guidance on the HMRC support page to discuss this further with HMRC.
Information on HMRC Errors reported back to Khaos Control
Invalid Date Range
We have had a report from a Quarterly customer who could not retrieve their obligations through Khaos Control and received this error. An update is planned to overcome this error, in the meantime if you do experience this error please contact our support team, who will be able to advise if you need a revised update.
FAQs
Is there a Test System?
No, HMRC have only provided a test system for use by developers and the test data provided to developers would be of no value as it is purely testing data.
MTD is active on your Live system but disabled on your Testing system.
What does it actually do, is any registration needed? Are there any other tasks needed to be done by the users?
The VAT information in Khaos Control's existing Tax screens is changed and made suitable for electronic submission. The system will prompt users with the relevant obligations / period for submission for their VAT and then export the information. To do this registration and configuration and access to your Business Tax account on the HMRC portal is required. As part of the MTD process you will be prompted to acquire an access token for your account and enter this into Khaos Control.
Are there any training materials, preview of screens?...
See Connecting to HMRC and Processing a VAT Return
Will this be issued to Customers as an update to their existing version of Khaos Control, will it be a whole new release or is it already in the existing version?
The new behaviours do require an update. We have now released updates to all of our customers, you need to be running 8.163.11 or newer. If you have any queries about the update please contact our support team.
Is there a timescale available to the release?
We have now released updates to all of our customers, you need to be running 8.163.11 or newer. If you have any queries about the update please contact our support team.
Will Direct Bank Transfer capabilities be part of this? i.e. to customers or suppliers?
No, this is not part of the Making Tax Digital elements we have integrated with.
What about the Fraud prevention elements of MTD?
As part of HMRCs new initiative we are required by law to gather and send information as part of the MTD submissions to help HMRC uniquely identify all submissions to help prevent against fraud. We do not retain any of this information it is used purely to be passed onto HMRC as part of the submissions. This functionality is included in the current version of Khaos Control, however further changes regarding this aspect of MTD are currently awaiting HMRC approval of Khaos Control and a further update will be required when these modifications are finalised.