Making Tax Digital - VAT

Welcome to our Making Tax Digital page, where you’ll find the latest information, analysis and practical guidance on what Making Tax Digital will mean for you.

Making Tax Digital is the Government’s plan to modernise and digitalise the UK tax system. Ultimately, this will have significant implications for both businesses and individuals.

In the 2025/26 Spring Statement, the Chancellor released a further update on Making Tax Digital (MTD) for Income Tax

The rollout of MTD for Income Tax will be expanded to include a wider range of small businesses and will operate as follows:

  • It will start from April 2026 for sole traders and landlords with qualifying incomes over £50,000.
  • It will extend to those with qualifying incomes over £30,000 in April 2027.
  • It will extend again to those with qualifying incomes over £20,000 from April 2028
  • In addition, the following groups will not be required to use MTD for Income Tax: customers who have a Power of Attorney, non-UK resident foreign entertainers and sportspeople who have no other income sources that count as qualifying income for MTD for Income Tax and customers for whom HMRC cannot provide a digital service.

For more information about how we can help you, get in touch

What is Making Tax Digital?

MTD for VAT requires businesses to:

a) keep records in a digital format and

b) submit VAT returns using commercial software (not via the existing government gateway account as many returns are filed at present). The detailed requirements have been published by HMRC in VAT Notice 700/22:

Unless the business meets one of the exemption requirements as outlined below

Exemptions from MTD

Some business may be able to claim exemption from MTD if any of the following apply:

  • On religious grounds, if the business is run entirely by practising members of a religious society for whom compliance with MTD is incompatible with their beliefs.
  • If it is not reasonably practicable for the business to use digital tools to keep records for reasons of age, disability, remoteness of location or for any other reason.
  • The business is subject to an insolvency procedure.

If businesses believe that they fall into one of these categories they will need to contact the HMRC VAT Helpline to discuss alternative processes for submitting VAT information. Exemption applications are now open at HMRC.

How can Ward Williams help you?

We have become increasingly aware that some software providers are charging significant additional fees for the provision of API enabled software.

There is no need for you to worry about upgrading/changing your existing software to API enabled software.  Whatever format your VAT records are maintained in, Ward Williams have already helped hundred of clients become compliant and submit their MTD VAT returns.

Ward Williams works with the below HMRC approved software providers for MTD for VAT.

           

Please contact us to discuss your individual needs and specific advice on how we will be able to help you on enquiries@wardwilliams.co.uk or call 01932 830664.