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VT Transaction+

Navigation: MTD for VAT

Behind the scenes

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This topic contains some technical information about how MTD for VAT works. You only need to read this topic if you are interested.

This topic is a simplification. In particular, HMRC's technical documentation uses different names for the codes referred to below.


An MTD application such as VT communicates with HMRC's computers via the internet using hypertext transfer protocol (http). This is the same method used to display web pages in browsers, but is done without the use of a browser.

HMRC specifies a web address for each MTD function. The main functions are retrieving lists of outstanding and submitted returns, and submitting a return.

VT has to send the correct data to the appropriate web address and interpret the data that is returned. The data sent includes an authorisation code (see below).

Granting authority

When the user chooses the Grant Authority command in VT, VT launches the appropriate page on HMRC's web site in the user's browser. The only data that VT has to supply to HMRC is VT's identifier code (a fixed code that has been issued to it by HMRC). No information about the user is sent.

If the user successfully signs in with their government gateway user ID and password, HMRC issues an authorisation code which the user is asked to paste into VT.

It should be noted that VT has no access to the government gateway user ID and password entered as these items are entered onto HMRC's web site and not into VT.

The user can grant authority concurrently any number of times to any number of applications. HMRC stores a list of the codes issued on the user's record on it's computers.

VT stores the authorisation code in the VT Transaction+ file, Excel workbook or on the user's PC (if the agent box is ticked in VT).

An authorisation code only remains valid for 15 minutes. At any time after that it can be swapped by VT for a new code which in turn only has a life of 15 minutes. Only the last code issued can be swapped. The sequence can continue for up to 18 months before the user has to grant authority again.

As a consequence of the above, if a copy of a VT Transaction+ file or workbook is made, only the first copy that attempts to swap it's code will be able to do so. If necessary, authority can also be granted from the other copy.

Similarly, an Excel workbook should be saved whenever the user is prompted to do so, or else the current code may be lost

VT has no access to the name of the user that granted authority or whether the user was a business or an agent.

When VT invokes an MTD function, it supplies VT's identifier code and the authorisation code. HMRC uses the authorisation code to access the user's record on it's computers and checks that the combination of codes is valid

Retrieving lists of outstanding and submitted VAT returns

VT sends the VAT number of the business and the authorisation code as outlined above to the appropriate HMRC web address.

HMRC uses the authorisation code to locate the MTD record of the government gateway user ID used to grant authority and returns the list of VAT returns.

If the VAT number does not match that on the record (or list of VAT numbers for an agent), an error code is returned. See The MTD Error.

Submitting a VAT return

Behind the scenes, VT accesses the list of outstanding VAT returns.

Each outstanding return has a period key. This key and the VAT return totals are sent to the appropriate web address by VT. HMRC returns the details for the submission receipt, or an error code if something is wrong.

Because a period key is required, it is only possible to submit a return which is listed as outstanding by HMRC.