The MTD for VAT is the first major phase in the Making Tax Digital initiative, the government’s plan to make tax administration more efficient and easier for taxpayers through the introduction of a fully digital tax system. It requires certain VAT-registered businesses to keep digital records, use MTD-compatible software and submit their VAT returns electronically. This expanded on 1st April 2022 and all VAT-registered businesses are now required to follow these rules.
All VAT returns have to be filed through HMRC’s MTD APIs. The interfaces that enable accounting systems to communicate with HMRC’s systems, these APIs are the keystone of the modern tax and customs system.
HMRC will be introducing Making Tax Digital (MTD) for Income Tax, Business Tax, and Landlord Tax from April 2024. From 2026, HMRC will seek to introduce MTD for Corporation Tax. Check out the GOV website guides and resources for more information.