Xero User News - Check and Update your Xero Connection to HMRC VAT

Check and Update your Xero Connection to HMRC VAT

Under Making Tax Digital (MTD) businesses need to grant permission for their accounts software providers to access their HMRC data and this permission must be updated every 18 months.

The following will not affect you if we, Armstrong Watson, manage your VAT Returns for you as we have our own agent authority with HMRC.

However, if we are not your VAT agent and you were one of the first businesses to sign up to MTD back in 2019, this 18 month period is coming to an end and you may find that Xero is no longer connected to HMRC. If so you will see a screen similar to that below:

Clicking on the Connect to HMRC box will take you through to your Government Gateway where you just need to click the Grant Authority button to restore access for another 18 months.

We have become aware of an issue whereby some clients are getting one of the following error messages when trying to make this reconnection:

• Unable to connect to HMRC
• We could not access outstanding VAT returns from HMRC when navigating to the VAT Return
• A problem has occurred. Press retry to try again.

If you see any of these error messages the checklist below should resolve the issue and restore your connection:

1. To rule out a browser issue, clear your browser’s cookies and cache.

If that doesn’t help, check the following points:

• The VAT number in the financial settings in Xero matches the VAT number in your Business Tax Account in HMRC.
• The account is signed up for MTD for VAT with HMRC. HMRC sends an email confirming the account is on the new service within 72 hours of signing up.
• The Government Gateway ID you’re using to connect Xero to HMRC is the same ID you used to sign up to MTD for VAT. Check the ID by signing in to your Business Tax Account in HMRC.

2. If none of the points above resolves the issue, reset the connection to HMRC:
   • Remove Xero’s connection permission (HMRC website).

• Use your MTD-enabled Government Gateway ID to set up MTD for VAT in Xero again.