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What is Making Tax Digital for VAT?

Broadly, MTD for VAT is a requirement on businesses to keep records in a digital format, file VAT returns using ‘functional compatible’ software and have a VAT return process that is ‘digitally linked’ and restricts the need for manual intervention in the preparation of VAT returns. The functional compatible software must be capable of receiving information from HMRC digitally via an ‘API’. All VAT-registered businesses must be compliant with the MTD requirements (albeit there are some very limited exceptions (see below). Businesses are automatically enrolled for MTD when submitting a new VAT registration.

Key considerations associated with MTD for VAT include the following:

Making Tax Digital ― who do the rules apply to?

The MTD for VAT obligations apply to all VAT registered