Making Tax Digital is HMRC's initiative to move the UK tax system fully online. For VAT, MTD has been mandatory since April 2022 for all VAT-registered businesses regardless of turnover. If you are VAT-registered and still submitting returns manually, you may already be non-compliant.
Most VAT-registered businesses submit a quarterly VAT return, so knowing your VAT quarters is the first step to avoiding a missed deadline. The VAT return deadline, for both filing and payment, is one calendar month and 7 days after the end of your VAT period. If your VAT quarter ends 31 March, for example, the deadline for that return and payment falls on 7 May. The same rule applies whether you run a large company or are filing small business VAT returns for the first time.
Not every business is on the same VAT periods. UK businesses can be assigned quarterly, monthly or annual VAT periods depending on turnover and scheme, so it is worth checking your own VAT return due date on your HMRC online account rather than assuming the standard quarterly cycle applies. Missing a VAT deadline in the UK now triggers penalty points under HMRC's points-based system, even before any financial penalty is charged.
HMRC maintains a list of approved software. The most popular options are:
MTD for Income Tax Self Assessment (MTD ITSA) is coming for sole traders and landlords earning over £50,000 from April 2026, and those earning over £30,000 from April 2027. This will require quarterly digital submissions to HMRC, a significant change from the current annual return process.
HMRC introduced a new penalty points system for MTD non-compliance. Late submissions accumulate points, and once a threshold is reached, a £200 penalty is charged. Multiple breaches can result in significantly higher fines.
We set up and manage MTD-compliant bookkeeping for UK businesses using Xero and QuickBooks. Get in touch for a free review.
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