Making Tax Digital for VAT: Essential Guide for 2025

What is Making Tax Digital?

Making Tax Digital (MTD) is HMRC's initiative to digitalise the UK tax system. For VAT-registered businesses, this means maintaining digital records and submitting VAT returns using MTD-compatible software.

Who Must Comply?

All VAT-registered businesses must now use MTD-compatible software for their VAT returns, regardless of turnover. This applies to all taxable periods starting on or after 1 April 2022.

Choosing Compatible Software

HMRC maintains a list of approved software providers. We can help you select the right solution for your business size and sector.

• Cloud-based accounting platforms
• Bridging software for existing systems
• API connections for bespoke solutions

Penalties for Non-Compliance

HMRC has introduced a points-based penalty system for late VAT returns. Understanding these penalties is crucial for maintaining compliance.

How RUS Can Help

Our team can assist with MTD implementation, software selection, training and ongoing VAT compliance. Contact us for a free MTD readiness assessment.