What Is Making Tax Digital for VAT?

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Last updated 23 October 2026. Written by the Limited Company Accountant UK team, part of Accotax. Figures are for the 2026/27 tax year; always check GOV.UK for the latest rates.

Short answer: Making Tax Digital for VAT means VAT-registered businesses must keep digital records and file VAT returns through compatible software instead of the old online form.

At a glance

Applies to All VAT-registered businesses
Software Xero, QuickBooks, FreeAgent and others

What changes

Records must be digital and returns filed straight from software, with digital links between systems.

Getting ready

Pick compatible software and sign up to MTD with HMRC.

Want this handled for you?

Fixed monthly fee, named accountant, free first consultation. Get a free quote or call 0203 4411 258.

The bottom line

Making Tax Digital for VAT means VAT-registered businesses must keep digital records and file VAT returns through compatible software instead of the old online form. If you would rather not do it alone, our fixed fees start at £45.83 + VAT a month.

Frequently asked questions

Do I need new software?

A

If your current tool is not MTD-compatible, yes.

Does MTD apply to Income Tax too?

A

Separately, for self-employed and landlords above thresholds. It does not apply to company profits.

Ready for a fixed monthly price?

Our packages start at £45.83 + VAT and cover accounts, tax and deadlines. Get a free quote or call 0203 4411 258.

JW
About the authorJames Whitfield, Senior Accountant

James Whitfield is a senior accountant at Limited Company Accountant UK, part of the Accotax group. He works with company directors on year-end accounts, Corporation Tax, VAT and director pay, and reviews every guide on this site against GOV.UK guidance.

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