What is Making Tax Digital for VAT?
Answered 11 March 2026
Making Tax Digital for VAT
HMRC Guidance / Practice
Making Tax Digital (MTD) for VAT is an HMRC initiative that requires all VAT registered businesses to:
- Keep digital records of their VAT transactions
- Submit VAT Returns to HMRC using compatible software
Key points about the regime:
- All VAT registered businesses are now required to be signed up for MTD for VAT — businesses no longer need to sign up themselves
- New VAT registered businesses are automatically signed up by HMRC unless they are exempt or have applied for exemption
- Where businesses use a combination of software programs, those programs must be digitally linked in certain circumstances
Note: No legislation (Acts of Parliament or Statutory Instruments) was returned in the retrieved sources, so no "What the law says" section can be provided here. The underlying legal basis for MTD for VAT is found in the Finance (No. 2) Act 2017 and associated regulations — you may wish to consult those directly for the statutory framework.
Citation sources
All VAT registered businesses should now be signed up for Making Tax Digital for VAT. You no longer need to sign up yourself. HMRC will sign up all new VAT registered businesses to Making Tax Digital for VAT automatically unless they are already exempt or have applied for exemption. You should now keep VAT records and submit VAT Returns using compatible software. Find software that’s compatible with Making Tax Digital for VAT.
Rules introduced under the Making Tax Digital initiative mean that all VAT registered businesses need to keep digital records and submit VAT Returns to HMRC using compatible software. This notice: explains the digital records businesses must keep, and ways to record transactions digitally in certain special circumstances explains what counts as compatible software, and when software programs do and do not need to be digitally linked where a combination of programs is used gives examples of when