Key facts
- MTD for VAT is mandatory for all VAT-registered businesses since April 2022.
- You must keep digital records and file returns via MTD-compatible software.
- You cannot file through HMRC’s online portal — you must use approved software.
- HMRC’s aim: reduce errors, improve accuracy, and make tax administration easier.
How MTD Changes VAT Filing
Making Tax Digital (MTD) is HMRC’s programme to modernise UK tax administration. For VAT, it means:[1]
- Keeping your VAT records in digital form
- Filing your VAT Return directly through MTD-compatible software
- Maintaining digital links between records and your submitted return
Who Must Comply?
Since April 2022, all VAT-registered businesses must use MTD for VAT, regardless of turnover. This includes:[2]
- Businesses above the £90,000 threshold (mandatory since April 2019)
- Voluntarily registered businesses below the threshold (mandatory since April 2022)
- Sole traders, partnerships, limited companies, charities, and other organisations
What Changed?
| Before MTD | After MTD |
|---|---|
| Could file via HMRC online portal | Must use MTD-compatible software |
| Paper records acceptable | Records must be digital |
| Manual data transfer allowed | Digital links required throughout |
What Are Digital Records?
You must store the following digitally for each transaction:[1]
- Date of supply
- Net value (excluding VAT)
- VAT rate charged
Plus your business name, address, and VAT registration number.
MTD for VAT Timeline
| Date | Milestone |
|---|---|
| April 2019 | MTD mandatory for businesses above £85,000 threshold |
| April 2022 | MTD mandatory for all VAT-registered businesses |
| November 2022 | Penalty reform: new points-based penalty system |
GoFile is HMRC-recognised MTD-compatible software for VAT. Get started free and file your next VAT Return in under 30 seconds.
Frequently Asked Questions
What is Making Tax Digital for VAT?
Making Tax Digital (MTD) for VAT is an HMRC programme requiring all VAT-registered businesses to keep digital records and file VAT Returns using MTD-compatible software, rather than through HMRC’s online portal.
Do I have to use MTD for VAT?
Yes. Since April 2022, MTD for VAT is mandatory for all VAT-registered businesses, regardless of turnover. This includes both compulsorily and voluntarily registered businesses.
Can I still use spreadsheets under MTD for VAT?
You can use spreadsheets as part of your record-keeping, but the data must flow digitally into your filing software without manual re-keying. You need bridging software to submit VAT Returns from a spreadsheet.
What digital records must I keep for MTD?
You must digitally store the date of supply, net value excluding VAT, and VAT rate charged for each transaction, along with your business name, address, and VAT registration number.
Further Reading
- Signing Up for MTD VAT
- MTD VAT Compatible Software
- Digital Links & Bridging Software
- Filing a VAT Return via MTD
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Sources
- Making Tax Digital for VAT — GOV.UK
- MTD for VAT: step by step — GOV.UK
- Sign up for MTD for VAT — GOV.UK