Making Tax Digital (MTD) is a government initiative designed to simplify tax processes for businesses. Sage 50 Accounts allows users to efficiently calculate, reconcile, and submit their VAT returns to HMRC. This guide walks you through the step-by-step process of submitting your MTD VAT return accurately using Sage 50 Accounts.
What is Making Tax Digital (MTD) VAT Return in Sage 50 Accounts?
Making Tax Digital (MTD) is a system introduced by HMRC to digitalize tax submissions, ensuring accuracy and efficiency. If your business is registered for MTD, you must submit VAT returns electronically through compatible software like Sage 50 Accounts. This ensures seamless tax reporting, compliance, and real-time access to VAT data.
Steps to Calculate and Submit Your VAT Return in Sage 50 Accounts
1. Calculate and Reconcile Your VAT Return
Before submitting your VAT return, you need to calculate and reconcile it within Sage 50 Accounts.
Check VAT Settings (For First-Time MTD Users)
- Ensure MTD VAT submissions are enabled in Sage 50 Accounts.
- Verify your VAT registration details and set up your VAT submission credentials.
Generate the VAT Return
- Navigate to VAT on the sidebar and select VAT Return.
- Click Back Up to secure your data before proceeding.
- Under Date Range, select the VAT period and click Calculate VAT Return.
- If unreconciled transactions from previous periods appear, choose Include or Ignore based on your preference.
Review and Reconcile the VAT Return
- Review VAT figures to ensure accuracy.
- Post any necessary adjustments.
- Print and store VAT return reports for record-keeping.
- Click Reconcile VAT Return, then select Yes to finalize the reconciliation.
2. Post the VAT Transfer Journal
After reconciling the VAT return, post a VAT transfer journal to update financial records.
Enter VAT Transfer Details
- Set the Transfer Date to match your VAT return period.
- Enter the Sales Tax Amount (value from Box 1 of the VAT return).
- Enter the Purchase Tax Amount (Box 4 minus Box 2 from the VAT return).
Post the Journal
- Click Post Journal to complete the VAT transfer process.
3. Submit Your VAT Return to HMRC
Once reconciled, the final step is to submit the VAT return to HMRC via Sage 50 Accounts.
Access the VAT Submission Window
- If the VAT return window is closed, reopen it by double-clicking on the reconciled VAT return.
- Click Submit Online to start the submission process.
Verify Your Business Details
- Confirm your company name and VAT Registration Number.
- Click Next to proceed.
Authorize Submission Through Gov.uk
- In the Gov.uk window, scroll down and click Continue.
- Enter your Government Gateway ID and password to log in.
- Follow the prompts to receive an Access Code, enter it, and click Continue.
- Click Grant Authority to allow Sage 50 Accounts to interact with HMRC.
Select the VAT Period and Submit
- Choose the correct obligation period for the VAT return.
- Tick the confirmation checkbox and click Submit to HMRC.
- Once the submission is successful, click Close.
What to Do If You Encounter a Submission Error?
If an error occurs while submitting your VAT return, follow these troubleshooting steps:
- Check Internet Connection – Ensure you have a stable connection to avoid interruptions.
- Verify VAT Registration Details – Confirm that your VAT number and credentials are correctly entered.
- Reattempt Submission – Close Sage 50 Accounts, reopen it, and try submitting again.
- Refer to Sage Knowledgebase – Search for the error message in Sage’s Help Centre for specific solutions.
Final Thoughts
Submitting your MTD VAT return using Sage 50 Accounts ensures compliance with HMRC’s digital tax requirements. By following these steps—calculating, reconciling, and submitting—you can efficiently manage your VAT obligations. If you encounter issues, QB Data Recovery Services support resources can assist in troubleshooting errors for a seamless VAT filing experience.
