Making Tax Digital for VAT (MTD for VAT) is an HMRC initiative introduced in April 2019 to modernise the UK tax system. Its purpose is to make VAT compliance more accurate, more efficient, and easier for businesses by requiring digital record‑keeping and digital VAT submissions.
Requirements for Using MTD for VAT
Under MTD for VAT, all VAT‑registered businesses with a taxable turnover above £90,000 must:
- Keep digital VAT records
- Submit VAT returns using HMRC‑recognised MTD for VAT software.
These rules ensure that VAT data is recorded and transmitted digitally, reducing manual errors and improving compliance.
The Advantages fo MTD for VAT
The core aim of MTD for VAT is to reduce mistakes and improve the accuracy of VAT reporting. By adopting digital VAT record‑keeping:
- Businesses save time and reduce admin
- Errors caused by manual entry are minimised
- Communication with HMRC becomes smoother
- Compliance with current UK VAT regulations is strengthened
For many businesses, MTD for VAT is not just a requirement - it's an opportunity to streamline their VAT processes.
Using a Spreadsheet or Incompatible Accounting Software
Many businesses still rely on spreadsheets or older accounting systems that are not MTD‑compatible. In these cases, MTD bridging software such as Easy MTD provides a simple, compliant solution.
Easy MTD links spreadsheets and non‑compliant software directly to HMRC's MTD for VAT system, allowing businesses to:
- Continue using familiar tools like Excel, Google Sheets, and OpenOffice Calc
- Keep their existing legacy or irreplaceable accounting software
- Submit VAT returns digitally without changing their record‑keeping process.
This makes bridging software an ideal option for businesses that want to comply with Making Tax Digital for VAT while maintaining their current workflow.
Complying With MTD for VAT
Whether you use accounting software or a spreadsheet, it's essential that your record-keeping system meets MTD for VAT requirements. Staying compliant helps avoid HMRC penalties and ensures your VAT submissions are accurate, timely, and fully digital.