Making Tax Digital is modernising tax by shifting taxpayers towards digital record keeping and online tax administration. Going digital makes your taxes more efficient, accurate and easy to manage.
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Making Tax Digital for VAT is here, but not all businesses are making the most of the digital shift. VAT filing the old-fashioned way is time-consuming and difficult to manage, with lots of potential for errors, particularly for growing businesses.
Gravitate’s digital VAT returns service helps businesses adapt to this shift. We will help you streamline and automate for faster and more accurate calculations, easier record keeping and compliance, and full integration with your existing accounting software.
Self-assessment taxpayers will soon need to submit their returns in accordance with Making Tax Digital. This will be happening gradually, with self-employed individuals and landlords earning more than £50,000 being affected first.
You can learn more about how this might affect you in our MTD for Income Tax blog.
Even if MTD isn’t required until 2026, 2027, or 2028, you may be able to enrol early through a government pilot program. There are a ton of benefits to doing this – you’ll get a head start with the requirements and can make your taxes easier to manage.
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We will ensure you always meet the key Making Tax Digital requirements, including your digital records and accuracy of data. We will also keep you updated with the latest from HMRC, so you never fall behind with your VAT obligations. We will help you reduce financial risk and prevent penalties.
Choosing the right suite of software and tools for your tax and accounts can be overwhelming. Our team of experts will help you select and implement the right HMRC-approved accounting software such as QuickBooks, Xero, Sage, or FreeAgent. We can also train your staff on how to use it most effectively.
We will save you time and stress by introducing the smartest new automation technologies to your VAT treatment. This includes VAT calculations based on real-time transaction data, invoice tracking and expense categorisation, and automatic VAT return submissions to HMRC.
Digital bookkeeping means no more manually typing up invoices. Instead, we will set you up with the best OCR technology in the market. This can read invoices for you and scrape all relevant information, including contact details, dates and details of amounts payable.
We will provide you with real-time financial insights using the best cloud-based software. This will enable you to monitor VAT liabilities any time, rather than waiting for the end of the month. You will also be able to track cash flow and profits in real time, so you can make data-driven business decisions.
MTD is a UK government initiative designed to digitise tax records and tax return submissions. Under MTD, businesses and individuals will need to use appropriate accounting software to keep records and submit tax returns online.
The scope of Making Tax Digital is currently limited to VAT-registered businesses, but self-employed individuals and landlords will be enrolled gradually from April 2026. Initially it will be those with annual income of over £50k. From 2027, this will include incomes over £30k, and £20k will be included from 2028.
Gravitate will help you select the most appropriate MTD-compatible software for you. The most popular platforms include Xero, Sage, QuickBooks and FreeAgent.
First, you will need to be set up with MTD-compatible software. Then you must register for MTD through the HMRC website using your Government Gateway ID. You can then connect your software to HMRC.
Yes, businesses can reclaim input VAT on a variety of business costs, including travel expenses, office supplies, equipment, services and machinery. VAT can’t be reclaimed on personal expenses of entertainment.
HMRC may issue penalties and fines under the new penalty system based on a points-based system. Repeated non-compliance may lead to fines.
Certain exemptions may apply if it is not “reasonable or practical” to use software or the internet to manage your taxes. This may be due to age, health conditions or disabilities, your location and internet access. It may also be due to religious beliefs. If you seek exemption, you will need to apply directly through HMRC.
Making Tax Digital intends to reduce tax errors, simplify record keeping, ensure compliance with HMRC regulations, and save time. The software can also provide you with real-time tax updates and financial insights, which are useful for making better financial decisions.
Making Tax Digital will likely be introduced for Corporation Tax, possibly after 2026. However there have been no official statements confirming this.
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