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Are you ready for Making Tax Digital for VAT in 2022?

Are you ready for Making Tax Digital for VAT in 2022?

Michelle Watson

This year, Making Tax Digital for VAT is being extended to smaller VAT businesses including the self-employed and landlords.

From April 2022, all VAT registered businesses, including those with taxable turnover below the current VAT threshold must keep digital accounting records and use third-party accounting software to submit their tax returns to HMRC.  (Larger VAT registered businesses have had to keep and submit VAT records digitally since April 2019). 

Businesses still submitting VAT returns via the HMRC portal or by post will need to keep records digitally, sign up for Making Tax Digital for VAT and file VAT returns through approved software.


Step 1
Before you sign up to Making Tax Digital for VAT you’ll need keep your VAT accounting records digitally.   You can find a full list of the records you need to keep here.

Records will need to be kept using a compatible software package (such as Sage, Xero or QuickBooks Online). 

You can keep records digitally on spreadsheets (such as Excel for example), but you will need to use bridging software to connect these to HMRC systems.

Reducing the cost of purchasing software
The good news is that there are ways you can reduce the overall cost of purchasing software. Government funding is now available to help offset up to 50% of the first year costs of purchasing digital accounting software.

Step 2
After you’ve got the right software in place you’ll need to sign up for Making Tax Digital for VAT.  To sign up you will need:
  • Your Government Gateway user ID and password (if you don’t have one you can create one when you use the service)
  • Your VAT registration number and latest VAT return
  • Your National Insurance number if you’re a sole trader
  • Your company registration number and Unique Taxpayer Reference (UTR) if you’re a limited company, registered society or partnership.  If you’re a partnership you will also need the postcode where you’re registered for Self Assessment.
To sign up, click here.

When to sign up to Making Tax Digital for VAT
If you pay by Direct Debit, it’s important that you do not sign up too close to the date your return is due or you may be charged twice.  To avoid this you should sign up at least seven days before your return is due or at least five days after your return is due.


Our team can help you to identify the best accounting software for your business and support you with the set up and give you and your team training to make sure you’re getting the most out of your software package.

If you have any questions or need further support, please contact your local Moore adviser.