Making Tax Digital for VAT Simplified

Published on 1 May 2020 at 12:00

  • HMRC states that the main goal of Making Tax Digital (MTD) is to make tax administration more effective, more efficient and simpler for taxpayers.


  • MTD for VAT is the first stage to be launched by HMRC. 


  • MTD for VAT applies to all VAT registered business with a taxable turnover above £85,000 except for the exempt groups (see below). 


  • Applies to VAT accounting periods from the 1st April 2019 onwards. 



  • To facilitate MTD for VAT businesses must use either a compatible software package that allows the business to keep digital records and submit VAT Returns digitally (includes Xero and QuickBooks Online) or a bridging software to connect non-compatible software (like spreadsheets) to HMRC systems. More information -


  • Exemptions - the 'digitally excluded', or those who cannot use digital tools for reasons of religion, age, disability, remoteness or any other reason, charities (although trading subsidiaries of charities will not be exempt), unincorporated businesses and landlords with annual sales below the £10,000 threshold.


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