What is Making Tax Digital?
Making Tax Digital (MTD) is part of HMRC’s ongoing programme to modernise and simplify the tax system. VAT-registered businesses and sole traders have been making MTD returns since 2019
What do I need to do for MTD for VAT?
- Digital record-keeping: You must keep and maintain digital VAT records using MTD-compatible software. This can include accounting software such as Xero, QuickBooks or Sage, or spreadsheets linked to HMRC through approved bridging software.
- Digital VAT return submissions: You must submit your VAT Returns to HMRC using MTD-compatible software. Manual entry of VAT figures through HMRC’s online VAT service is no longer permitted for most VAT-registered businesses.
- VAT return deadlines: VAT Returns and any VAT due must usually be submitted and paid one calendar month and seven days after the end of your VAT accounting period. The exact deadlines depend on your VAT stagger period and filing frequency.
- Digital links: Where more than one software product or spreadsheet is used to prepare your VAT Return, information must be transferred electronically between systems using digital links. Manual re-keying of data between systems is generally not permitted.
- Exemptions: Some businesses may be exempt from MTD for VAT if it is not reasonably practicable for them to use digital tools, for example due to age, disability, remoteness of location or religious beliefs. An exemption must usually be agreed with HMRC.
How we can help
Stay compliant with Making Tax Digital using our VAT Controller, the fast, easy-to-use bridging solution for managing and submitting your VAT returns. HMRC-tested and fully MTD-compliant, it offers flexible and cost-effective options to meet the needs of businesses of all sizes. Take a look at our VAT Controller service and pricing on the link below.