VAT - Online Filing of VAT100 and VAT101 (ECSL)
The system is recognised for the online filing of VAT returns and EC sales lists. We recommend that if you are unsure about any aspect of completing a VAT return, please consult your professional advisor.
If you make zero rated supplies to VAT registered businesses in the European Union, then at the same time as making a VAT100 return it is also necessary to file an EC Sales List (VAT101) which shows the VAT registration numbers of the businesses you have supplied to and the turnover. An online filing process exists for this, the process description of which is given below.
This guide addresses the following topics.
- Online VAT100 filing - the process in summary
- Initiating the system for online VAT filing
- Completion of Data
- Entering Sender ID and password
- The Filing Process
- Important Information about Deadlines
- Status and Messages
- Failure of a Submission
- EC Sales List (VAT101)
- VAT 101 - The Filing Process
- Important information about validation and errors on EC Sales Lists (VAT101)
Online VAT100 filing - the process in summary
To be done outside of the system and must be done well in advance of filing
Register with HMRC for online filing and obtain an ID and select a password. Registration can be completed at the Government Gateway for electronic submission of returns: www.gateway.gov.uk
Activate the service by using the Activation PIN that is sent to you by the HMRC within seven days of registering.
Activating MTD within Liberty Accounts
HMRC currently only allow VAT 100 via Making Tax Digital. As other types are made available by HMRC you will need to renew your authorisation here with the additional types selected. All other filings made from Liberty such as VAT ECSL, P11D Expenses & Benefits, RTI Payroll, and Gift Aid Claims continue to require the Government Gateway user name and password.
Note that MTD authorisations are expired by HMRC after 18 months. We recommend you renew your authorisations each year to avoid problems caused by expired authorisations.
Navigate to the HMRC menu and select MTD Authorisation. Click on the link for more detailed guidance
HMRC - MTD Authorisation
Inside the System
- Ensure that all data is complete, the details of all transactions for the VAT period have been entered and are correct
Initiating the system for online VAT filing
The system is initiated for online VAT filing by clicking the Use Online VAT on the VAT configuration screen. HMRC normally expect that, in conjunction with online VAT return filing, payments be made by direct debit. If a bank account is selected in the AutoPost Direct Debit dropdown the system will post the direct debit to the account when it processes a success response from the Government Gateway.
For payments the Gateway response includes a collection date. For repayments, however, responses do not include a date for the repayment; so the system will make a posting dated 10 days after the processing of the Gateway response. Finally confirm the VAT Postcode of the address shown on the VAT registration certificate. Click SUBMIT to store.
HMRC - Configure VAT
Completion of Data
Once a VAT return has been submitted and accepted at the Government Gateway it is not possible to make any changes via the system; so it is clearly beneficial to ensure that the details of all transactions for the VAT period have been entered accurately before moving to submitting a VAT return.
You can inspect the details of the VAT return by using the VAT Transaction reports for the period.
HMRC - Reports - VAT Transactions
Entering Sender ID and password
A sender ID and password provides the submitter with access to the Government Gateway for any relevant online filing activity for the current entity, not necessarily just VAT. To avoid having to enter the details repeatedly, you store your Government Gateway credentials for the current business. When records for submission to the Government Gateway are generated by you, the system will copy your credentials onto the submission record. The screen is accessed via the Entity Name menu
HMRC - Credentials
The password is stored using a one-way encryption method so your password cannot be viewed by anyone else. To clear your credentials simply submit the form with no data.
The Filing Process
When the particular VAT period is finished and the VAT data has been inspected and is complete, accepting the VAT100 form commences the online filing process. The VAT 100 form is accessed and accepted via the VAT menu.
HMRC - VAT RETURN (VAT100) - ACCEPT
The acceptance then places the return in a queue in the system. At this point DELETE will reverse the complete process and reset the system to its status prior to accepting the VAT100.
VIEW provides a VAT 100 report, in pdf format, to be printed and stored. Whilst the system retains copies of previous reports that can be viewed and printed at any time it is STRONGLY recommended a copy is printed at this time.
Important Information about Deadlines
The queued return is submitted by the system to the Government Gateway. Submissions are made at each odd hour on the hour so 11:00, 13:00 etc. continuously. The system then polls for return messages from the Government Gateway and posts them to the submitting entity at each even hour on the hour 12:00, 14:00 etc.
Status and Messages
The details of the status and any messages can be viewed at the systems Government Gateway menu item, via the VAT menu.
VAT - Government Gateway - VAT100
The status and response screen is displayed.
Clicking VIEW will display any messages
We recommend that you regularly review messages until you are sure that the full return has been made. The status will be one of the following:
- Failed - Local Validation
- Failed - Remote Validation
- Failed - Max Tries
- Indicates that an item exists in the system but has not been "sent" by the user. Typically an item is generated at the request of the user. Once it has been generated the user will need to review and possibly add to the automatically generated details of the submission. In all cases the user will at least need to add their authentication credentials as provided by the Government Gateway before they can successfully submit to the Gateway.
- Indicates that an item has successfully passed local validation in the system and is now in a queue waiting to be sent to the Government Gateway. Queued items are normally processed each odd hour on the hour e.g. 11:00, 13:00 etc
- Indicates that an item has been recalled from the Gateway queue. An item can be recalled from the queue at any time before it has been sent to the Government Gateway. It is also possible to recall an item if it has failed remote validation and a change is required before resubmission. e.g. incorrect Gateway password.
- Indicates that an item has been sent to the Government Gateway and the system is currently polling the Gateway at each even hour on the hour (12:00, 14:00 etc) to check the status of the submission.
- Failed - Local Validation
- Indicates an item has failed local validation. The system uses its best endeavors to validate data before trying to send it to the Government Gateway. An item with this status will need to be changed before it can be successfully queued for the Gateway.
- Failed - Remote Validation
- Indicates that an item has failed validation in the Government Gateway system. An item in this state can be deleted or recalled for any necessary changes to be made prior to resubmission.
- Indicates that the Government Gateway has acknowledged an item as a successful submission.
- Failed - Max Tries
- Indicates that the system has given up trying to send an item to the Government Gateway. If you have an item at this status you should contact Liberty Accounts support
Failure of a Submission
If the submission fails, take note of the message that describes the nature of the failure. Delete the failed report so that the system is reset and corrections may be made
VAT - Reports - View Saved VAT Return Reports - the relevant report
Make the corrections as necessary and repeat the acceptance process described above.
We recommend that you regularly review messages until you are sure that the full return has been made.
EC Sales List (VAT101)
If you are UK VAT registered trader that makes zero rated supplies to a registered trader in another member state, then an EC sales list (VAT101) is required. For online filing, the EC sales list created by the system will only include those invoices to Customers who have a VAT number indicated as validated and a Country which is a EU member state.
Financial penalties may be imposed if returns are not made. You will need, from each registered trader you deal with, a valid VAT number in the correct format of the relevant member state. You can download from the HMRC web site a file called ?EC Country Codes and Customer VAT number formats? if you need to check the format. You are advised to consult your advisor if you are in doubt. The VAT number is entered in the Customer details.
Sales - Customers - List and EDIT relevant customer
EC Sales Lists (V101) are normally filed on a calendar quarter basis as follows:
- 1 Jan - 31 Mar Qtr. 1
- 1 Apr - 30 Jun Qtr. 2
- 1 Jul - 30 Sep Qtr. 3
- 1 Oct - 31 Dec Qtr. 4
However monthly filing can be used under certain circumstances. The online filing system defaults to calendar quarter filing, but the cycle can be changed to monthly in VAT configuration.
VAT 101 - The Filing Process
Ensure you are happy that all transactions and customer information has been entered for the relevant quarter period. Start the process by going to the VAT EC Sales List (VAT101) under the VAT menu.
VAT - VAT EC Sales List (V101)
A report showing the system-generated figures is then displayed. If necessary you can amend Country and VAT number details (If you do this it will also change the details held for the customer). You can also exclude an item, if appropriate, by clicking the exclude box and preventing the data being transmitted to the gateway.
Note that the default transaction indicator is set to B2B (business to business) that will be the most common. However use the dropdown to change to Triangulation if necessary. If you are unsure as to the correct indicator to use we strongly advise you consult your advisor.
Clicking on SUBMIT queues the return to the Government Gateway, in a similar manner to the VAT100 above. The details of the status and any messages can be viewed at the systems Government Gateway menu item, via the VAT menu.
HMRC - VAT 101 EC Sales List
Clicking on VIEW will display any messages form the Gateway. It is important to do this regularly until you are sure that the full return has been made. Please see the comments on errors below
Important information about validation and errors on EC Sales Lists (VAT101)
The format of the Customer VAT number is validated by the system and it is not possible to proceed until the formats are correct. However the Government Gateway has algorithms to check the actual VAT number, these algorithms are not available to software developers so it is possible for a VAT number to be in the correct format but still be invalid when submitted at the gateway e.g. two figures transposed 35 should be 53. In any submission if there are more than 30% errors the gateway rejects the whole submission. You will then need to make corrections and resubmit the whole report. If there are errors, but less then 30%, the submission is accepted by the gateway and the errors reported in the messages. The example here demonstrates that 3 items have been successfully filed but there were errors.
Returning to the VAT101 report, under the HMRC menu, users can see the actual errors.
HMRC - VAT101 EC Sales List
Simply correct the error and resubmit. Whist there are uncorrected errors the next report cannot be run. Please note that if you have a late transaction that has been missed, enter it in the normal way. Running the VAT101 again for the same calendar quarter will create a full report (including those items that have already been submitted). If this full report is submitted the Government Gateway will accumulate all figures to the previous report clearly overstating things for the calendar quarter. Therefore ensure that previous items are excluded before submitting. Alternatively report the late transaction using manual error correction form VAT101B (can be downloaded from the HMRC web site) and posting.