Making Tax Digital for VAT Submissions

Building on the foundations outlined in Getting Started with Making Tax Digital, where we explored the basics of MTD, let's delve into its application for VAT. As a VAT-registered business owner, you're at the forefront of this digital shift, facing the need to adapt your processes efficiently.

What is Making Tax Digital for VAT?

Making Tax Digital (MTD) for VAT is a government-led initiative that changes how VAT-registered businesses manage and report their VAT. Instead of manual records or traditional online submissions, MTD requires digital bookkeeping and submission through compatible software. It’s all about making tax simpler, more accurate, and more efficient.

Since its launch in April 2019, MTD has shifted the way UK businesses handle VAT. It’s no longer just an upgrade—it’s the law.

Under MTD, you must:

  • Keep digital VAT records

  • Use MTD-compliant software to submit your VAT Returns

  • Stop using the HMRC online portal (unless exempt)

Think of MTD as the new normal for VAT—and a chance to streamline your business finances.

Deadlines for MTD and VAT

MTD for VAT became mandatory for businesses with turnover above £90,000 from April 2019, extending to all VAT-registered businesses from April 2022. As of 2025, compliance is ongoing with no new deadlines; quarterly submissions remain standard. Late adopters risk penalties – details in Challenges and Considerations in MTD.

Stat: Over 1.8 million businesses are now compliant with MTD for VAT submissions.

Registration for MTD and VAT

HMRC automatically registers all VAT-registered businesses for MTD for VAT, eliminating the need for manual sign-up. New registrants are enrolled unless exempt. Ensure your details are up-to-date via your VAT account. For setup guidance, see Registration and Setup for MTD.

Government Gateway and Login

Access MTD for VAT through your Government Gateway account, which serves as the secure login portal. Use your user ID and password to authorise software connections. If you're appointing an agent, grant permissions here. Step-by-step help is available at gov.uk.

Compliant Software for MTD VAT Submissions

Select MTD-compliant software that records VAT digitally and submits returns via API. Options include full packages or bridging tools for spreadsheets. Key requirements: HMRC compatibility, error-checking, and secure data handling. Popular choices like Xero, QuickBooks, and Sage are approved – explore more in Compliant Software for MTD.

Exemptions from MTD for VAT

Certain businesses qualify for MTD for VAT exemptions if digital compliance is impractical, such as due to age, disability, remote location, religious beliefs, or insolvency. Exemptions aren't automatic (except insolvency) and require HMRC application with evidence. Apply exemption via gov.uk.

Not sure? Check eligibility for your situation in Specific Scenarios in MTD

Making Tax Do-able with PJL Accounts

PJL Accounts excels in supporting diverse audiences through MTD transitions, from self-employed to partnerships. Our clients share: "As a landlord, PJL made compliance straightforward." Count on our tailored expertise.

Guided Preparation Steps

✅ Step 1: Check if You’re Registered

  • New VAT registrations are auto-enrolled into MTD.

  • If you registered before April 2022 and haven’t switched, you need to act now.

✅ Step 2: Register for MTD for VAT (if needed)

  • Use your Government Gateway login

  • Sign up here: Sign Up with HMRC

  • Register at least 7 days before your next VAT Return is due

  • Wait for HMRC confirmation (usually within 72 hours)

✅ Step 3: Using an Agent?

  • We can register and manage MTD for you

  • You stay hands-off—we do the admin and handle compliance

If challenges arise, reach out to us for tailored assistance.

Remember we are here to enhance your work life balance. We have three ways to get you ready for ‘Making Tax Digital’.

Frequently Asked

  • It extended to all from April 2022; confirm your status with HMRC.

  • Submit a request to HMRC with supporting evidence; processing takes 2-4 weeks.

    Request an exemption here: Apply for MTD Exemption

  • Use bridging software or switch – options in Compliant Software for MTD.

  • Software fees vary; potential penalties for non-compliance are covered in Challenges and Considerations in MTD.

  • No, but see Specific Scenarios in MTD for edge cases.

Keep Your VAT Compliance on Track

Mastering MTD for VAT positions your business for efficient tax management and growth. Embrace it to avoid fines and disruptions. Talk with PJL Accounts today for expert help in staying compliant and stress-free.