Making Tax Digital explained

On 7 August 2019, the first group of quarterly VAT filers had to submit their first return under Making Tax Digital (MTD).

Businesses with turnover above the VAT threshold are now required to keep their records digitally and send their VAT returns to HMRC directly. 

More than 1.2 million businesses have now signed up and more than 1.7 million VAT returns have been successfully submitted through the service to date. This represents a significant milestone in the digitisation of the UK’s tax service.

In addition, around one million VAT registered businesses with a turnover below the VAT threshold, and who are not required to use the service, have chosen to do so. 

If you are a self-employed business or landlord you can also voluntarily use the software to keep business records and send Income Tax updates instead of filing a Self Assessment tax return. 

Before you sign up to Making Tax Digital for VAT you’ll need either:

  • A compatible software package that allows you to keep digital records and submit VAT Returns
  • Bridging software to connect non-compatible software (like spreadsheets) to HMRC systems
  • Commercial software products recognised and listed by HMRC which can be used to submit online.

The majority of customers want to get their tax right but many find this hard, with avoidable mistakes costing the Exchequer over £9bn a year. The improved accuracy that digital records provide and the fact that information is sent directly to HMRC, avoiding transposition errors, will reduce the amount of tax lost to these avoidable errors.

  • To read this feature in full and access further Lancashire business news, advice and analysis subscribe to Lancashire Business View magazine or join the LBV Hub from just £2.50 per month. Click here to subscribe now.

Enjoyed this? Read more from Martin Garry, McDade Roberts

Latest news

1

Pleasure Beach Resort takes home four prizes at UK Theme Park Awards Pleasure Beach Resort’s David Hill, head of rides, and Stuart Cumming, marketing manager with the awards

Pleasure Beach Resort takes home four prizes at UK Theme Park Awards

18 Sep 2025

2

Brookhouse Aerospace invests more than £500k in additional machinery to support growth Brookhouse Aerospace machining facility

Brookhouse Aerospace invests more than £500k in additional machinery to support growth

18 Sep 2025

3

Growth Plan maps out £20bn-plus investment journey Mo Isap from the Lancashire Business Board with the plan

Growth Plan maps out £20bn-plus investment journey

18 Sep 2025

4

Post Office future secured as council explores new options Abington Street Post Office

Post Office future secured as council explores new options

17 Sep 2025

5

Airframe Designs supports new defence strategy with pledge to nurture talent Jerrod Hartley

Airframe Designs supports new defence strategy with pledge to nurture talent

17 Sep 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Cumbria Business Expo 2025
https---cdn.evbuc.com-images-880461633-4862066883-1-original.20241022-110415.jpeg.jpg
LBV Hub Exhibitions
19 Sep 2025 - 19 Sep 2025

Cumbria Business Expo 2025

Carlisle Racecourse, Carlisle, CA2 4TS

09:00 - 15:00

Preston Freelancer Meet-Up: September
Sept Freelancer (1).png.png
LBV Hub Networking
23 Sep 2025 - 23 Sep 2025

Preston Freelancer Meet-Up: September

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Your Business, Your Region: Making sense of devolution and Local Government Reorganisation
Chorley Council breakfast event new
LBV Hub Networking
23 Sep 2025 - 23 Sep 2025

Your Business, Your Region: Making sense of devolution and Local Government Reorganisation

Worden Hall, Leyland, PR25 3DH

08:00 - 11:00

Speed Networking with BNI
2.png.png
LBV Hub Networking
24 Sep 2025 - 24 Sep 2025

Speed Networking with BNI

Chorley Football Club, Chorley, PR7 3DU

16:00 - 19:00

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) drop-in day
MTD drop in session.jpg.jpg
LBV Hub Seminars
25 Sep 2025 - 25 Sep 2025

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) drop-in day

Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) drop-in day, Blackburn, BB1 5QB

10:00 - 16:00

The Marketing Metrics That Matter – Sept 25
Metris 25.09.png.png
LBV Hub Seminars
25 Sep 2025 - 25 Sep 2025

The Marketing Metrics That Matter – Sept 25

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

09:00 - 11:00

The Marketing Meetup IRL: Lancashire - September
TMM Lancashire
LBV Hub Networking
25 Sep 2025 - 25 Sep 2025

The Marketing Meetup IRL: Lancashire - September

Chorley, PR7 2SL

18:00 - 20:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

Chamber Breakfast Networking – October
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
07 Oct 2025 - 07 Oct 2025

Chamber Breakfast Networking – October

Soul Bowl, Morecambe, LA4 4BU

08:00 - 10:00

The Future of Work: Tech, teams and thriving in a changing world
Oct PTC.png.png
LBV Hub Networking
07 Oct 2025 - 07 Oct 2025

The Future of Work: Tech, teams and thriving in a changing world

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV124 Online Graphic
Subscribe now

Weekly news bulletin