Making Tax Digital

Most VAT registered businesses with a taxable turnover above £85,000 must follow the rules for Making Tax Digital for VAT. This means you’ll need to:

  • keep digital VAT records
  • sign up for Making Tax Digital for VAT
  • use software compatible with Making Tax Digital to submit VAT Returns.

Who must follow the MTD rules from 1 April 2019

You must use software to keep digital VAT records from your first VAT Return period starting on or after 1 April 2019 if your business:

  • has a taxable turnover over £85,000
  • is not in the deferral group

You must sign up for Making Tax Digital at least one week before your VAT Return is due.

Who must follow the MTD rules from 1 October 2019

You might be in the deferral group and must use software to keep digital VAT records from your first VAT Return period starting on or after 1 October 2019 if your business:

  • has a taxable turnover over £85,000
  • is part of a VAT group or VAT division
  • is a trader based overseas
  • is a trust
  • is a not for profit organisation that is not set up as a company
  • uses the annual accounting scheme
  • is a local authority
  • is a public corporation
  • has to make payments on account
  • uses the VAT GIANT service

HMRC will send you a letter to tell you that you’re in the deferral group.

You must sign up for Making Tax Digital at least one week before your VAT Return is due.

Who can apply for an exemption?

You do not need to apply for an exemption if either:

  • you’re already exempt from filing VAT Returns online
  • your business’s taxable turnover is below £85,000

You can apply for an exemption if you:

  • cannot use computers, software or the internet because of your age, a disability or where you live
  • or your business are subject to an insolvency procedure
  • object to using computers on religious grounds