VT Report User Guide

Use this option if you want to record your transactions in the Digital record sheet template rather than your own spreadsheet.

Initial setup

If you haven't already done so, sign up to MTD for Income Tax before completing the steps below.

1.Open VT Report by clicking on its icon on your desktop (If the icon is not there, go to https://www.vtsoftware.co.uk and click on Download VT Software):

2.From the Application (App) screen that opens, select Digital records sheets > then choose the relevant template:

•Not VAT registered

•Not VAT registered Joint landlord

•VAT registered

3.This creates a digital record sheet for you to enter transactions, called 'Business 1' by default. If you want to rename it, right-click on 'Business 1' and select Rename.

Save the file by selecting Active File (File) > Save.

(It is best to have AutoSave on from then on: Application (App) > AutoSave (On).)

A Taxpayer menu and Digital Record menu are also activated:

4.From the Taxpayer menu, select:

•Details, then enter your name (the taxpayer) and National Insurance (NI) number

(If you are VAT registered and want to also submit your VAT returns from the same file, enter your VAT number here also).

•Grant Authority, then follow the guidance from the relevant link below:

oGrant authority: taxpayer: if you are the taxpayer submitting your own quarterly updates

oGrant authority: agent: if you are an agent submitting on behalf of taxpayers

5.From the Digital Record (Record) menu, select:

•Type of Business, then select Self-employment, UK property or Foreign property.

•Options (only if your accounting period does not start from 6 April), then select the tax year, and change Reporting period option to calendar. If changing, this must be done before the first quarterly update is submitted for a tax year, otherwise you have to wait until the next tax year.

Enter transactions

(The screenshots below refer to the 'VAT registered' digital records sheet, where the type of business has been selected as self-employment, however the same process applies to the other digital record sheets and business types unless otherwise stated.)

1.Select the digital record sheet from the left pane:

2.Enter the following data for each individual1 income and expense transaction. Transactions should cover the start of the tax year to the quarter-end being reported.

For example, the VAT registered template for self-employment:

If you want to repeat the same data or formula on several rows, you can use the fill down function to do this in one action.

Notes on Category column

•If sales (or rent for property) transactions are left blank they will be automatically categorised as 'Sales/Turnover' (or 'Rent' for property).

•If 'Full form' is selected when generating the quarterly update and an expense transaction is blank, it will be automatically categorised as 'Other expenses'. If this is not the appropriate category, make sure you have selected an appropriate category on the digital record sheet before generating the quarterly update.

•If 'Short/summarised form' is selected when generating the quarterly update and an expense transaction is blank, it will be automatically categorised as 'Total allowable expenses', which is permitted for a short-form quarterly update2.

•For all other transactions, a category must be selected.

•Reversals/refunds cannot be blank. Select the relevant income or expense category.

•If you enter data in a Name/details cell that has been entered before, you can recall the previous category associated with those details, by selecting the Category cell, then selecting Digital record (Record) > AutoSet Category from the main menu.

Generate a quarterly update

1.Select the digital record sheet from the left pane:

2.To generate a quarterly update sheet from these records, select Digital Record (Record) > Generate Quarterly Update, then:

•Enter the From and To dates, according to Quarterly update dates. You can either enter these manually, or select Set dates > [Select the tax year] > [Select the period], which will retrieve the required dates from your HMRC records.

•A name for the sheet is automatically generated, or you can enter different name.

•If your turnover is less than £90k for the tax year, select 'Short/summarised form'2. Otherwise, select 'Full form'.

•Click on the Generate button:

3.The quarterly update is generated on a new sheet, for example:

A Backup report, which displays the breakdown of the figures on the quarterly update, is also generated further down on the same sheet. This data is not submitted to HMRC:

You can return to the digital record sheet (named 'Business 1' in the example above) at any time by selecting it from the left pane.

4.If you have made any mistakes and want to re-generate the quarterly update, make the corrections on the digital record sheet, then re-generate the quarterly update as instructed in step 2.

Submit the quarterly update

1.Select the quarterly update sheet from the left pane, then from the main menu, select Quarterly Update (QU) > Submit:

2.A dialog opens displaying the quarterly update data to be submitted:

Click on Submit then OK to next message to submit to HMRC.

The following confirmation message then appears:

To display the submitted quarterly update, select the quarterly update sheet, then from the main menu select Quarterly Update (QU) > Current submission, which displays the most recent quarterly update stored by HMRC with the word 'Submitted'3. There may be a short delay before HMRC systems are updated.

You can keep a copy of this by clicking Copy All and pasting to a spreadsheet, or clicking Print.

3.To view a list of previously submitted quarterly updates (as well as those due/not yet due), select Taxpayer > Income Tax obligations > [Select the tax year].

Subsequent quarterly updates

You can use the same digital record sheet to enter transactions and generate quarterly updates for subsequent quarters:

1.Select the digital record sheet from the left pane:

2.Enter transactions for the current quarter directly under the previous quarter's transactions (so that transactions are cumulative from the start of the tax year).

3.Generate the quarterly update in the same way as shown in Generate a quarterly update, which will overwrite the data on the existing quarterly update sheet. Alternatively, you can generate the quarterly update on a new sheet, by entering a different name when generating the quarterly update.

Multiple businesses

If you have more than one self-employment business, you can submit quarterly updates for each one from the same VT Report file.

You will need to add a digital record sheet for each business by selecting Sheet > Add > [Select the relevant digital record template] and follow the same instructions above from Enter transactions onwards.

You can also add a digital record sheet(s) for property.

The number of digital record sheets/quarterly update submissions required is as follows:

Jointly owned property

If the individual's only mandated income for MTD is from a joint property, follow the same steps from above, but with the following specific instructions:

•In step 2 of Initial setup, choose the Not VAT Registered Joint Landlord template.

•In step 2 of Enter transactions, you only need to enter the following transactions1:

oone transaction each quarter for the total amount of each relevant income category

oone transaction at the end of the tax year for the total amount of each relevant expenses category

•In step 2 of Enter transactions, the Not VAT Registered Joint Landlord template includes a column to enter the individual's % share of the transactions.

The quarterly update can be submitted the same way as shown in Submit the quarterly update.

You can follow the same process for the other joint owner in a separate file (so long as their only income for MTD is joint property income).

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1.Exceptions to the requirement to digitally record transactions individually:

Retail sales

If you make retail sales, HMRC allows you to keep digital records of daily gross takings (DGT) rather than individual sales (according to section 3 of Making Tax Digital for Income Tax: digital record-keeping notice).

Share of income and expenses from jointly let properties

According to the section 'Specific record keeping requirements' in Create digital records - GOV.UK; you can:

•create a single digital record for each category of property income that you receive in an quarterly update period

•create a single digital record for each category of property expense that you incur in a tax year

This means you only need to record one transaction each quarter for the total amount of each relevant income category, and one transaction each year for the total amount of each relevant expenses category.

Purchases from a supplier statement

Although there is an exemption in MTD for VAT that allows you to keep digital records of summary totals (by each VAT rate) of purchases from a supplier statement rather than individual invoices, there is no specific HMRC guidance that says whether a similar exemption exists for income tax purposes. This topic has been discussed in the following ICAEW webinar in the section 'Digital record keeping'.  

2.Simpler short-form quarterly update

If turnover for the income type being submitted (self-employment, UK property or foreign property) is (or expected to be) less than £90,000 for the tax year being reported, you are permitted to submit a short-form quarterly update, which simplifies the categories of expenses to a single category of 'total expenses' (except for residential finance costs for property, which must be categorised separately as 'residential finance costs').

If you are not sure if you will come under the turnover threshold, you should use the full-form quarterly update. For further details, see the section 'Specific record keeping requirements' in Create digital records - GOV.UK.

3.Current submission

This data comes from HMRC. For reasons unknown, HMRC only displays the word 'Submitted' on submitted quarterly updates for self-employment and not for property.