Making Tax Digital (MTD) is a way of enabling greater accuracy of tax returns by removing manual processes while keeping digital records and using third-party software to submit tax returns to HMRC.
Making Tax Digital for VAT
All VAT registered businesses, regardless of their taxable turnover, are now required to use MTD for their VAT reporting and record keeping obligations.
Download our factsheet within the publications section below for further details on complying with MTD for VAT.
1. Get the right software
Before you sign up, you must have software that:
- Lets you submit VAT Returns; and
- Is compatible with Making Tax Digital for VAT.
QuickBooks, Sage and Xero all offer MTD compatible software packages. To find out more about each of these software solutions visit our Business Services and Software Support page and download the relevant factsheet in our publications section.
2. Sign up for Making Tax Digital for VAT with HMRC
If paying by direct debit, HMRC recommend registering for MTD for VAT at least 5 working days after the last non-MTD submission and at least 7 working days before the first MTD submission.
If the submission is not by direct debit, sign-up must be at least 72 hours before the first MTD submission
You will need:
- Your Government Gateway user ID and password; and
- The VAT number of the business that is signing up.
You will receive an email within 72 hours to confirm that you can submit returns using software that’s compatible with Making Tax Digital for VAT.
Do not submit a VAT Return until you receive the confirmation email.
You must send your VAT Return using compatible software.
You can still view your next VAT Return deadline in your Business Tax Account.
After you have signed up, you cannot use the old VAT online services to send VAT Returns.
3. Authorise your software
Before you can send VAT returns, you will need to authorise your software.
Download our factsheets below for the ‘final steps’ to take within QuickBooks, Sage and Xero.
Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA)
Making Tax Digital for Income Tax Self Assessment means using digital record keeping to report earnings to HMRC and sending Income Tax updates instead of filing a Self Assessment tax return.
From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software.
Those with an income of between £30,000 and £50,000 will need to do this from April 2027.
Every three months you will be required to use your compatible software to send a summary of your business income and expenses to HMRC.