by Asim Abbas
11 November 2026 
Making Tax Digital for VAT: the rules every VAT business follows
Making Tax Digital for VAT: the rules every VAT business follows
Since April 2022, every VAT-registered business must follow Making Tax Digital for VAT, whatever its turnover.
- Applies to all VAT-registered businesses
- Digital records and compatible software
- Digital links between programs
- Old VAT online portal closed
That means keeping digital records and submitting VAT returns through compatible software, with digital links between any spreadsheets.
This guide explains the requirements and common compliance issues.
What MTD for VAT requires
- Keep digital records of each supply made and received
- Submit returns using MTD-compatible software
- Use digital links where data moves between programs, no manual copying
- Keep records for six years
Digital records
For each sale and purchase, record the date, value and VAT rate. Retailers and some schemes have simplifications, such as daily gross takings.
Free tax calculators
Business tools.
Digital links
If you use spreadsheets, data must move between them and your submission software digitally, such as imports, formulas or links. Copying and pasting by hand isn’t allowed, although cut and paste is generally accepted as a digital link.
A café records sales in its till system and purchases in a spreadsheet. It exports till totals into the spreadsheet with a CSV import, and uses bridging software to submit the VAT return from the spreadsheet. That chain meets the digital link rules.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Penalties
Late returns earn points under the points system, with a £200 penalty at the threshold. Failing to keep digital records can also lead to penalties. See our VAT penalties guide.
Exemptions
You can apply for an exemption if you’re digitally excluded due to age, disability, location or religion, or are subject to an insolvency procedure.
Using an agent
Accountants can keep records and submit returns for you, which removes most of the burden.
See HMRC’s guidance on MTD for VAT, our bookkeeping basics and our VAT services.
What should I do next?
MTD-compatible?
Use digital links.
Avoid points.
Frequently Asked Questions
Does MTD for VAT apply to me?
Yes, if you are VAT registered.
Can I use spreadsheets?
Yes, with bridging software and digital links.
What is a digital link?
A digital transfer of data between programs, without manual re-typing.
Can I be exempt from MTD for VAT?
Yes, if digitally excluded or insolvent.
How long must I keep VAT records?
Six years.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Ali Imran
I’m Ali Imran, an accountant at Wingate Accountants. I help sole traders, landlords and directors get their returns filed early and accurately, without the last-minute panic.
