Making Tax Digital for VAT

Phase 1 of HMRC’s “Making Tax Digital” plan is coming into force in April 2019.  This phase of implementation is focusing specifically on VAT registered businesses.  This means that if you are a VAT registered business in the UK, from 1 April 2019 you will be required to keep your financial records digitally and file those with HMRC on a quarterly basis through a functional compatible software.  Want to know more about why this is happening and how you can remain compliant?  Then read on!



The History of Making Tax Digital

It is HMRC’s ambition to be one of the most digitally advanced tax administrations in the world, and they intend on achieving this ambition by getting all UK businesses to keep their records and file their information digitally.  Hence “Making Tax Digital” was born.  The plan is to digitalise types of UK tax including income tax, corporation tax and VAT, to name just a few.  With a project this big it was always inevitable that the changes would come in phases.  Since VAT is already filed quarterly, and the majority are already filed online, this was the most natural place for HMRC to start.


How to be compliant

For your business to be compliant your digital software must be able to:

  1. Record and preserve digital records
  2. Provide to HMRC information and returns from data held in those digital records by using the API platform
  3. Receive information from HMRC via the API platform

If your software meets all of the above criteria then it is called “functional compatible software”. A full list of all software suppliers who are ready for Making Tax Digital for VAT can be viewed at

We recommend Xero to our clients, but as you can see from the list, there are many other options available.


Timing the change

The Making Tax Digital for VAT rules come into effect from the first VAT return period starting on or after 1 April 2019.

VAT quarter period dates To be filed under Making Tax Digital?
1 February 2019 – 30 April 2019 No
1 March 2019 – 31 May 2019 No
1 April 2019 – 30 June 2019 Yes
1 May 2019 – 31 July 2019 Yes


Are you ready?

If after reading the above information you are uncertain if you are ready for the change on 1 April 2019, then please do contact us on [email protected] or 01634 540340 and we will help ensure that you are.