Businesses who are mandated into Making Tax Digital for VAT must use 'functional compatible software'.

This is a freeview 'At a glance' guide.

Subscribers see Making Tax Digital for VAT 

At a glance

Key requirements

1. To keep records in electronic form (digitally).

2. To use functional compatible software.

3. To submit VAT returns via your software to HMRC.

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

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

In terms of software issues:

For the initial phase of MVD your software is required to submit the 9 figures that make up the VAT return to HMRC.

What are digital links?

Practical concerns and examples

The needs of the business and the potential issues for MVD depend on the type of business and the tools it is using to record its VAT transactions, see Making VAT Digital (subscriber guide)

Useful guides on this topic

Making VAT Digital (subscriber guide)
What is Making Tax Digital for VAT? What is VAT 'functional compatible' software? What do you need to do to report your VAT? Are there penalties for making mistakes?  

VAT Notice 700/22: Making Tax Digital for VAT
HMRC has published VAT Notice, 700/22: Making Tax Digital for VAT, which sets out who needs to follow the MTD rules, what records need to be kept, and what agents need to do.


Oak ad
Are you enjoying our content? 

Thousands of accountants and advisers and their clients use www.rossmartin.co.uk as their primary TAX resource.

Register with us now to receive our receive our FREE SME Topical Tax Update & newletter.