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MTD for VAT
If you are VAT-registered, MTD for VAT applies regardless of your income tax MTD status. You must keep digital VAT records and submit returns through compatible software.
- Separate from MTD for Income Tax — many businesses need both
- All VAT-registered businesses are in scope unless exempt
- Records must support every figure on each VAT Return
What it is
Making Tax Digital for VAT requires VAT-registered businesses to keep digital records and submit VAT Returns using functional compatible software. It is separate from MTD for Income Tax but many businesses must follow both.
VAT periods are usually quarterly. Your software records sales and purchases, calculates VAT due, and submits the return to HMRC. Flat Rate Scheme users still need digital records. If you deregister from VAT, MTD for VAT obligations end — but income tax MTD may still apply.
Who it applies to
All VAT-registered businesses must follow MTD for VAT rules, unless HMRC has granted a specific exemption. This includes companies, partnerships, and sole traders above the VAT registration threshold.
What you need to do
- Keep digital VAT records (sales and purchases).
- Submit VAT Returns through MTD-compatible software.
- Ensure records support the figures on each return.
Key points
- MTD for VAT applies even if your income tax is below MTD ITSA thresholds.
- Some businesses use the VAT Flat Rate Scheme — records must still be digital.
Common mistakes to avoid
- Treating VAT turnover and income tax turnover as the same figure
- Re-typing totals from paper into software without digital links (VAT)
- Missing VAT deadlines because only income tax reminders were set
How SelfSubmit helps
SelfSubmit focuses on income tax monthly records today. If you are VAT-registered, use MTD VAT software alongside SelfSubmit for your self-employment records.