Making Tax Digital - New Rules for VAT Returns from 1 April 2019

New VAT rules don’t need to give you a headache

Making Tax Digital - New Rules for VAT Returns from 1 April 2019

Businesses in the UK who are registered for VAT will need to comply with the new Making Tax Digital (MTD) for VAT requirements from 1 April 2019. If you’re not registered for VAT and don’t plan to be in the foreseeable future, then this won’t affect you. However, MTD for VAT is the first stage of HMRC’s plans to digitalise tax submissions, so other aspects of business tax will follow.

There are two parts to the MTD VAT requirements. The first is that you need to record certain VAT information digitally and keep it for up to 6 years. This does not mean that you need to scan everything. You can record the necessary information on a spreadsheet if you want, as long as you include the essential fields such as supply tax point, value and rate of VAT.

The second part of the MTD requirement is that you need to upload your VAT return to HMRC using MTD-compatible software. You will not be able to key your 9-Box VAT return into HRMC’s online portal as before. There are two ways to submit your return:

  1. If you already record your VAT information digitally using a standard accounting package which is compatible with MTD, register this with HMRC and use the package tools to submit your return.

  2. If you don’t use an accounting package, you’ll need to ensure that you capture the required VAT information digitally, eg in a spreadsheet, and use ‘bridging software’ to submit your VAT return to HMRC. Note that if you choose this option, you’ll need to import your VAT information into the bridging software digitally - you cannot rekey the data manually.

Registering for MTD for VAT is straightforward. Once you’ve decided on your method (MTD-compatible integrated accounting package or bridging software), sign up for Making Tax Digital for VAT via If you’ve previously submitted returns on paper and don’t have a Government Gateway account, you will need to register for this first. Note that your Government Gateway account requires an activation code sent by post, so leave at least 10 days for this to arrive.

Many popular small business accounting packages, such as Quickbooks and Xero, are already compatible with MTD. If you’re not sure, check HMRC’s list of compliant software

Further information can be found at on HMRC’s helpful summary of MTD for VAT