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MTD for VAT—overview of provisions

At a high level, MTD for VAT is a requirement on taxable persons to keep records in a digital format and file VAT returns using 'functional compatible' software. A key aspect of the digital record keeping requirement is that the VAT return process must be digitally linked. This means that data transfer between programmes must be digital and the use of human intervention (such as copying and pasting data) is not permitted. The main requirements of the regime are legislated for in SI 1995/2518, reg 32A. Notice 700/22 is particularly relevant to MTD for VAT and includes information which has the force of law, and is identified as such, as well as information which is HMRC guidance.

The legislation refers to the digital record-keeping requirements as 'the electronic account' and prescribes various information that a taxable person must keep in their electronic account¹. The electronic account has to be maintained using 'functional compatible software', the form of which HMRC may prescribe².

Information that