Making Tax Digital (MTD): Quick facts
- MTD requires every VAT registered business to record and submit VAT returns electronically using ‘functional compatible software’.
- Companies must use software to keep digital records of specified VAT-related documents.
- Stored records must include designatory data and summary VAT data for the period.
- Use of multiple pieces of software is allowed.
- The format of the VAT return is a 9-box summary, filed via the HMRC’s JSON API platform, which must be digitally linked between the customer’s source data and the submitted digital return. Businesses receive and send information to HMRC via API.
- Each business must set up a new digital tax account and should follow a new authentication process.
- Submission of digital records can be in a range of digital formats, including XML, CSV, and Excel, provided they are API enabled.