Guidance

Check when a business must follow the rules for Making Tax Digital for VAT

Find out if and when you (or your clients) need to follow the rules for Making Tax Digital for VAT, or apply for an exemption.

Most VAT registered businesses with a taxable turnover above £85,000 must follow the rules for Making Tax Digital for VAT. This means you’ll need to keep digital records and submit VAT Returns using compatible software.

Any VAT registered business can start following the rules now, unless your business uses the VAT Government Information and National Health Trusts (GIANT) service.

Who must follow the rules from 1 April 2019

You must keep digital VAT records from your first VAT Return period starting on or after 1 April 2019 if your business:

You must sign up for Making Tax Digital at least 72 hours before your VAT Return is due, or 7 days before if you pay by direct debit.

Who must follow the rules from 1 October 2019

You might be in the deferral group and must keep digital VAT records from your first VAT Return period starting on or after 1 October 2019 if your business has a taxable turnover over £85,000 and either:

HMRC will send you a letter to tell you that you’re in the deferral group. If you haven’t received a letter, you’re not in the deferral group.

You must sign up for Making Tax Digital at least 72 hours before your VAT Return is due, or 7 days before if you pay by direct debit.

Who can apply for an exemption

HMRC will consider an application for exemption if you:

  • cannot use computers, software or the internet because of your age, a disability or where you live
  • or your business are subject to an insolvency procedure
  • object to using computers on religious grounds

You do not need to apply for an exemption if:

  • you’re already exempt from filing VAT Returns online
  • your taxable turnover is below £85,000

Apply

To apply for an exemption, call or write to HMRC. You’ll need:

  • your VAT registration number
  • your business name and address
  • details of how you currently file your VAT Return
  • the reason you think you’re exempt from Making Tax Digital
  • authorisation from the business (if you’re applying on someone’s behalf)

You’ll get a letter with HMRC’s decision. Until then, continue filing VAT Returns the way you usually do.

What happens next

Check what digital records you’ll need to keep.

Before you sign up, you’ll need software that’s compatible with Making Tax Digital for VAT.

Published 8 February 2019
Last updated 9 April 2019 + show all updates
  1. The bullet points at sub-heading 'Who must follow the rules from 1 October 2019' have been updated to include 'has a taxable turnover over £85,000'.
  2. Information on signing up voluntarily, when to sign up and who is exempt from Making Tax Digital for VAT has been added.
  3. If your business makes payments on account, you're in the deferral group and need to start following the rules for Making Tax Digital for VAT on 1 October 2019.
  4. First published.