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News & Portal: Tax

Making Tax Digital for VAT

21 July 2020  
Posted by: HMRC
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Check when a business must follow the rules for Making Tax Digital for VAT

Find out if and when you need to start keeping digital records, sign up and submit a return using software.

Published 8 February 2019
Last updated 21 July 2020 — see all updates
From: HM Revenue & Customs

Contents

When to start keeping digital records
When to sign up
When to submit a return using software

If you’re a VAT registered business with a taxable turnover above £85,000, you must follow the rules for Making Tax Digital for VAT unless:

  • your business uses the VAT GIANT service – HMRC will contact you to tell you when the deadline is
  • you apply for an exemption

From 1 April 2022 all VAT registered businesses must follow these rules regardless of turnover.

You can choose to follow the rules voluntarily now.

When to start keeping digital records

If you’re a VAT registered business with a taxable turnover above £85,000 you should be keeping digital records now.

If your taxable turnover is below the VAT threshold of £85,000 you should keep digital records from your first VAT return period starting on or after 1 April 2022.

When to sign up

If you’re a VAT registered business with a taxable turnover above £85,000 you should have signed up to Making Tax Digital for VAT. If you have not, you should do this as soon as possible.

If you are VAT registered business with a taxable turnover below £85,000:

  • you can sign up now
  • you must sign up before your first VAT return period starting on or after 1 April 2022

If you do not pay by Direct Debit, sign up at least 72 hours before your return is due.

If you pay by Direct Debit, sign up at least 7 working days before or 5 working days after your return is due. Make sure your last Direct Debit has come out of your bank account before signing up.

When to submit a return using software

You must use software for Making Tax Digital for VAT to submit your first VAT return starting on or after 1 April 2022.

The deadlines and frequency of your returns will not change after you sign up. To see when your next return is due, sign in to your VAT online account.


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