This notice gives guidance on the digital record keeping and return requirements for Making Tax Digital for VAT.
Making Tax Digital explained
Making Tax Digital for VAT requires all VAT-registered businesses to keep records digitally and file their VAT Returns using software.
The software businesses use must be capable of:
- keeping and maintaining the records specified in the regulations
- preparing VAT Returns using the information maintained in those digital records
- communicating with HMRC digitally through our Application Programming Interface (API) platform
If your digital records are up to date, the software will be able to collate and prepare your return for you. It will show you the return and ask you:
- to declare the information is correct
- confirm you want it submitted to HMRC.
Once you’ve submitted your return, you’ll receive confirmation through your software that it has been received.
This notice provides further details of the Making Tax Digital rules.
Exemptions from Making Tax Digital
You do not need to follow the rules for Making Tax Digital if HMRC is satisfied that:
- it’s not practical for you to use digital tools to keep your business records or submit your VAT Returns – this may be due to reasons such as age, disability or location
- you (or your business) are subject to an insolvency procedure
- your business is run entirely by practising members of a religious society (or order) whose beliefs are incompatible with using electronic communications or keeping electronic records
- you’re already exempt from filing VAT returns online
Read more at HM Revenue & Customs