Making Tax Digital for VAT: Who Qualifies and What You Get
Learn how VAT-registered businesses must use digital tools to keep records and submit tax returns under this mandatory system.
Making Tax Digital for VAT is a government requirement that changes how VAT-registered businesses keep their financial records and submit their tax returns.
Who it's for
This scheme is for any business that is registered for VAT and has a taxable turnover of more than £85,000.
What you get
The system moves tax management into a digital format. You are required to use digital tools to keep your business records and must submit your VAT returns directly to the government through compatible software. This process relies on "digital links," which means your record-keeping and submission must be connected digitally rather than through manual data entry.
What it costs you
To comply with these rules, you will need to pay for accounting software that is specifically designed to be compatible with this digital system.
The catch to know
Even if you were already filing your tax returns online through a portal, you must still sign up for this specific digital system to meet the new requirements.
How to apply
- Ensure your business turnover meets the required threshold.
- Choose and set up compatible accounting software.
- Use your software to maintain digital records of all transactions.
- Submit your VAT returns through your software to the official portal.