Making Tax Digital
Making Tax Digital for VAT: software, digital links and what HMRC expects
Every VAT-registered business must keep digital records and file VAT Returns through compatible software. What MTD for VAT requires, what a digital link is, and how to check your software.
By the Nemexio team · · 5 min read
Who has to follow MTD for VAT
Making Tax Digital for VAT applies to VAT-registered businesses, whatever their turnover [4]. You must register for VAT if your VAT-taxable turnover goes over £90,000 [3], and many smaller businesses register voluntarily.
HMRC's Notice 700/22 sets out the rules on digital record keeping and how returns must be sent [2].
Software or bridging software
You need either a compatible software package that keeps digital records and submits VAT Returns, or bridging software that connects a non-compatible tool — such as a spreadsheet — to HMRC's systems. HMRC runs a search service to find both [1].
What a digital link is
If you use more than one program — for example, a job management app and an accounting package — the data must flow between them digitally. Examples of digital links include linked cells in spreadsheets, importing and exporting files, and API connections; copying and pasting or retyping figures does not count [2].
This is one reason to choose invoicing, accounting and credit control tools that connect through an API rather than by manual export.
Checklist
Related feature: Integrations — Plugs into the tools you already use.
Sources
- [1]GOV.UK (HMRC) — Find software that's compatible with Making Tax Digital for VAT
- [2]GOV.UK (HMRC) — VAT Notice 700/22: Making Tax Digital for VAT
- [3]GOV.UK — VAT registration: when to register
- [4]GOV.UK (HMRC) — Overview of Making Tax Digital
- [5]GOV.UK (HMRC) — Record keeping (VAT Notice 700/21)
Sources checked on 25 September 2026. This article is general information, not legal advice. For a specific contract or dispute, take independent advice.