Implications of MTD for VAT


As HMRC continue to push ahead with Making Tax Digital, our MTD consultant Anne Cianchi takes a look at how these regulations will affect the way we process VAT.

From April 2019 businesses will have to:

  • Keep digital VAT records and
  • make VAT submissions to HMRC using MTD enabled software.


Digital VAT Records

HMRC have confirmed that the keeping of digital VAT records does not mean that all invoices and receipts have to be kept digitally, these can still be kept in paper form if preferred.  However, it does mean that key data from those invoices will have to be kept digitally. These details will include:

  • Date
  • Value
  • Rate of VAT charged

In addition to these transactional details, information about the business will also need to be kept digitally. Such information includes:

  • Name of the business
  • Principal address
  • VAT registration number
  • Details of any VAT schemes used

VAT Submissions

Under the MTD regulations businesses will no longer be able to file their VAT returns by using the current HMRC portal. Instead their MTD enabled software will submit the information from the nine boxes on the VAT return, directly to HMRC. Where the VAT return data is made up of information from more than one dataset this will need to be combined digitally before submission.

So, who will this effect?

These MTD rules will apply to all VAT registered businesses above the VAT threshold (currently £85,000). This includes sole traders, partnerships, companies and charities. Businesses below the threshold who have registered for VAT voluntarily will be able to chose whether to continue submitting VAT returns on the HMRC portal or whether to sign up for MTD submissions. It is worth noting that once you have signed up for MTD for VAT you will not be able to change your mind and opt out later.

Volunteers for testing required

At Farmplan we are working together with HMRC to develop our software to meet these MTD requirements. In order to ensure everything runs smoothly we will be taking part in a beta testing programme with HMRC which will start in May 2018. If you would like to participate in this testing please contact the MTD Development Team by by calling 01594 545011 or contacting