VAT Guide for Small Businesses
VAT Making Tax Digital
What You Need to Know
What You Need to Know
VAT MTD has been mandatory since April 2019 for businesses above the threshold. Find out if it applies to you and how we can handle all your VAT compliance.
£85,000
VAT registration threshold
Apr 2019
VAT MTD mandatory since
Digital
Records and submissions required
What is VAT MTD?
A Legal Requirement for
VAT Registered Businesses
VAT Registered Businesses
VAT Making Tax Digital is a government requirement that mandates businesses above the VAT turnover threshold to keep digital records and submit VAT returns via MTD compatible software.
This system aims to streamline VAT reporting, reduce errors, and give HMRC a more accurate real time picture of tax collected across UK businesses.
If your VAT taxable turnover exceeds £85,000 in any 12 month period you must comply. Manual submissions via the HMRC website are no longer allowed for compliant businesses.
Digital records mandatory
All VAT records must be kept digitally using HMRC recognised software. Paper and manual spreadsheets alone are not sufficient.
No more manual HMRC submissions
VAT returns must be submitted directly from digital records using compatible software. Manual portal submissions are banned.
Bridging software available
If you use spreadsheets, bridging software can connect them to HMRC. We recommend fully integrated software instead.
The Threshold
£85k
VAT Taxable Turnover Threshold
If your VAT taxable turnover exceeds £85,000 in any 12 month period you must register for VAT and comply with VAT MTD rules from the next VAT accounting period. Businesses below the threshold can join voluntarily.
Sales revenue
Subject to VAT
Other VAT outputs
Included in threshold
VAT exempt sales
NOT included in threshold
Voluntary sign up
Available below threshold
Key Requirements
What VAT MTD Requires From You
Hover each card to read the full detail.
Digital Record Keeping
All VAT records must be kept digitally
Digital Record Keeping
All VAT records must be kept digitally using HMRC recognised software. Paper records and manual spreadsheets alone are no longer acceptable for compliant businesses.
Digital Submissions
Submit VAT returns directly from software
Digital Submissions
VAT returns must be submitted directly from your digital records using MTD compatible software. Manual submissions via the HMRC website are no longer permitted.
Compatible Software
Must use HMRC approved MTD software
Compatible Software
You must use software that HMRC has approved as MTD compatible. We help you select the right software and handle all setup so you do not have to worry about it.
Timeline
When Did VAT MTD
Become Mandatory?
Become Mandatory?
VAT MTD has been mandatory for most VAT registered businesses with turnover above the £85,000 threshold since April 2019. If your business is VAT registered and above the threshold you should already be complying. If you are not sure whether you are compliant contact us and we will check.
April 2019
Mandatory for businesses over £85k threshold
Already Live
If you are VAT registered above threshold you must comply now
Voluntary
Businesses below £85k can sign up voluntarily
Exemptions and Deferrals
Who Can Be Exempt from VAT MTD?
In certain circumstances a business may qualify for an exemption or deferral from VAT MTD requirements.
Below the VAT Threshold
If your VAT taxable turnover is below £85,000 you are not required to comply with VAT MTD. You may choose to sign up voluntarily to benefit from simpler digital record keeping and easier submissions.
Special Circumstances
Certain businesses may qualify for an exemption — for example those with religious beliefs against using digital tools or those with specific functional difficulties. These exemptions are subject to HMRC approval and must be applied for directly.
Already Above the Threshold and Not Complying?
VAT MTD penalties can include surcharges, interest charges, and formal compliance notices from HMRC. If you are VAT registered and above the £85,000 threshold and not currently using MTD compatible software, contact us today. We will get you compliant quickly.
How We Can Help
Complete VAT MTD
Support from Us
Support from Us
You do not need to figure out software, submissions, or compliance rules yourself. We handle all of it. Whether you are just registering for VAT or already VAT registered and need to get compliant — we are here.
Select and set up MTD compatible software for your business
Manage your VAT record keeping digitally for accuracy
Prepare and submit your VAT returns on your behalf
Advise on VAT registration, exemptions and deferrals
Keep you informed and avoid HMRC penalties
Stay Ahead of Your VAT
Get Your VAT MTD
Sorted Today
Sorted Today
Contact us to discuss your VAT MTD readiness and get expert help. We will check your compliance, set up the right software, and handle all submissions going forward.
