HMRC says that is working with more than 150 software suppliers who have said they’ll provide software for Making Tax Digital for VAT in time for April 2019.

Key practical issues

If you are computer literate, and not excluded from MVD on the grounds such as being digitally inept, then you must now use software that can directly report your VAT returns to HMRC. 

Under MVD you will not be allowed to use HMRC's current online VAT service and key your return figures in directly. 

  • It may be that this is allowed for a period which MVD is bedding in, however HMRC has not provided any details of what kind of 'softlanding' taxpayers may expect in April 2019.

In terms of software issues:

  • If you use a spreadsheet to calculate your VAT returns, you need to use bridging software to transmit your spreadsheet VAT entries to HMRC.
  • HMRC only require the 9 figures that make up the VAT return.
  • If you use a spreadsheet to record raw data you will need a digital link from that to your accounting software. HMRC does not want you to re-key any entries and the use of a journal to enter a total from a spreadsheet is strictly verboten*
  • There is a soft landing on digital links between bookkeeping, accounting or spreadsheet software: linking is not required for the first year.

HMRC's examples 7, 8 and 9 in section 7 (the last page) of VAT Notice 700/22 provide some confort for those who use different recording methods, use spreadsheets and make accounting adjustments.

MVD pilot

The MVD pilot opened to some businesses on 16 October 2018. Businesses with access to functional compatible software can start making MVD submissions.

Links: HMRC current list of MVD suppliers


* verboten: a useful German work meaning forbidden by someone in authority.