MTD for VAT returns simplified with 3 months FREE on Sage Accounting
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Stress-free Making Tax Digital for VAT software

All businesses need MTD compatible software following the 1 November change to the way VAT returns are filed. Get started with MTD compatible software today, then submit your return direct to HMRC. With software like Sage Accounting, it's simple.
Are you an accountant or bookkeeper? Explore MTD for accountants and bookkeepers

MTD for VAT with Sage Accounting features

Prepare, track, and submit tax easily with Making Tax Digital compatible software.

  • Get your VAT submission right. Choose different VAT rates for your invoices with just a click. Produce invoices that are inclusive or exclusive of VAT
  • Calculate your bill. Get automatic calculations whether you’re on a standard, cash accounting, or a flat rate scheme
  • Submit directly. Send your VAT return straight to HMRC at the touch of a button
  • Retain VAT right. Record VAT payments or refunds to clear your liabilities, and get help staying compliant for any future checks
  • Improve accuracy of accounts. Correct mistakes easily. Edit or delete invoices, credit notes, and more with just a few clicks
  • See how much you owe. Always be prepared with real-time VAT totals
  • Share access with your accountant. Collaborate with them in real-time so they can check your VAT return
  • Keep digital records. Store them all in one place with secure cloud access. Pull in data automatically with live bank feeds and AutoEntry
  • Easy invoicing. Create customised invoices and track payment progress end-to-end. Add a ‘pay now’ button for faster payments
  • Connected banking. Automatically match transactions to invoices, payments, and purchases, saving you time and improving accuracy
  • Insightful reporting. Get the details you need on cash flow, aged debtors and advanced views of business performance
  • Get help fast. Access support from our team of experts via telephone, chat or email
  • Free online learning. Access live webinars and short courses to help you take control of your finances and make the most of Sage Accounting


Goodbye manual tasks, hello automation

Say goodbye to spreadsheets. Keep your data safe, automate your processes, and stay MTD-ready. Going digital has never been so simple.

Automation

Automate bank reconciliation, connect bank feeds, set up recurring invoices, and more.

Accuracy

Reduce manual errors and correct mistakes with software that automates for greater accuracy.

Accountability

Keep track of your financial records, and monitor changes to your data with an accurate audit trail.

Cloud storage

Keep your data safe with cloud storage, two-factor authentication, data encryption, and more.

Video guides to Making Tax Digital

Make sure your business is sorted when it comes to MTD. Stay on top of MTD and learn ways you can keep digital records and submit VAT returns to HMRC using our step-by-step video guides.  

MTD - Manage and submit your VAT Return

We show you how to manage and prepare for Making Tax Digital for VAT. Get familiar with real-time access and automation within Sage Accounting. Submit VAT returns with ease, collaborate with accountant, and confidently process and amend transactions from one place. 

MTD - Digitise your accounts with mobile apps and AutoEntry

Find out how to simplify MTD with AutoEntry for receipts and invoices in Sage Accounting. Digitise your records with ease. Go between mobile app or tablet to manage accounts, create invoices on the go, and enter transactions as they happen.

MTD – Automate your bank transactions with bank feeds

Find out how to simplify digital record-keeping with AutoEntry integration for Sage Accounting. Manage your accounts on the go with Sage Accounting's mobile app. Create invoices and quotes on the go, capture and keep images of receipts, and enter transactions as they happen.

MTD – Creating invoices made easy

Learn how to create sales and purchase invoices easily through Sage Accounting whilst staying up-to-date with new MTD legislation. Let Sage calculate your VAT automatically and use the document timeline to see what stage your invoices are at, in case you need to help them along. 

MTD – Pre-populate your invoices with key information

Find out how you can save time by pre-populating your invoices with products and services. Set up key information such as description, price and VAT rates to populate automatically on your invoices. Reduce the risk of entry errors and feel confident knowing your records are quick, easy and accurate.

Get MTD-ready in 4 simple steps

With Sage, compliance is easy. Check out the steps below, and make sure you're set up for Making Tax Digital.

Step 1

Choose MTD-compatible software like Sage.

Step 2

Visit Settings > VAT Details to check your information is correct.

Step 3

Start keeping digital records for your current and future VAT returns.

Step 4

Connect your software, then file VAT returns directly to HMRC.

Master MTD compliance with a Sage Accounting plan

Get full access to your product, then upgrade or cancel at any time. No long-term contracts, commitments or hidden fees.

Accounting Start

For VAT-registered sole traders or cash accounting small businesses.
per month / excl. 20% VAT*
Get 3 months free
Features
Compatible with:

Accounting Standard

For small businesses working with suppliers, CIS, or with accrual accounting.
per month / excl. 20% VAT*
Get 3 months free

Features
Everything from Accounting Start and:


AI features

30 included + £0.20 per additional approved capture

Compatible with:
COPILOT INCLUDED

Accounting Plus

For small businesses managing inventory or working in multiple currencies.
per month / excl. 20% VAT*
Get 3 months free

Features
Everything from Accounting Standard and:


AI features

1 Copilot user included. Add more in-product

100 included + £0.20 per additional approved capture

Compatible with:

*Get 3 months free, then £15/£30/£59 + VAT/mo (tier depending). Terms and conditions apply.

Add Payroll starting at 5 employees from £10.00 per month excl. VAT with the option to add up to 150 employees. Add additional employees in-product at £2.00 per month (Essentials), £4.00 per month (Standard) and £6.00 (Premium). Prices exclude VAT.

Download your Making Tax Digital Guide

Learn more about Making Tax Digital (MTD) and what HMRC's new scheme means to your business and discover the steps you need to take to submit returns.

Download guide

Businesses mastering MTD with Sage Accounting

MTD for VAT Software FAQs

For more MTD knowledge and advice, check the FAQs below or visit our Sage Advice section on everything MTD for VAT.

Right now, only UK VAT-registered businesses are affected by MTD. However, there’s a goal for all UK businesses to comply in future. 

April 2022: MTD will apply to VAT registered businesses with taxable turnover 

April 2026: Businesses, self-employed individuals, and landlords with an income over £50,000  will need to follow MTD for Income Tax Self Assessment rules from their next accounting period. 

April 2026: The earliest possible date for MTD for Corporation Tax after the government announced it wouldn’t be mandated before then.

April 2027: MTD for Income Tax Self Assessment will then apply for businesses, self-employed individuals, and landlords with income over £30,000.

 

Making Tax Digital was put in place to reduce tax admin for taxpayers, make it easier to submit returns, and reduce the likelihood of errors.  By complying with MTD legislation and adopting compliant software you’ll be able to easily view tax information in one place, and you’ll get total peace of mind that you’re compliant when all VAT registered businesses will need to complete their VAT returns under MTD in April 2022. 

With MTD-compatible software you can: 

  • Reduce the amount of paperwork you have 
  • Ensure VAT returns are accurate 
  • Easily manage bookkeeping from one place 
  • View real-time tax information when you need it 
  • Keep track of funds to stay on top of business 
  • Get more time back to focus on your business 

From April 2022, all VAT registered businesses with taxable turnover need to start using Making Tax Digital software so that they can submit tax returns digitally.  

It’s simple to connect our accounting software for making tax digital to HMRC. When you go to complete your VAT return in Sage Accounting you’ll have the option to authenticate with HMRC in 3 simple steps:

  • Select Reconnect and Authenticate to go to the HMRC website
  • Select Continue and enter your Government gateway User ID and Password
  • Select Grant Authority and you’ll return to Sage Accounting connected to HMRC

The first phase of MTD started in April 2019, mandating that most VAT registered businesses with taxable turnover over £85,000 keep digital tax records. The next phases of MTD include: 

April 2022: MTD for VAT will be extended to all VAT registered businesses, including those below the VAT threshold. 

April 2026: The mandation of MTD for Income Tax Self Assessment will be introduced from April 2026, with businesses, self-employed individuals, and landlords with income over £50,000 mandated to join first.

April 2026: The earliest possible date for MTD for Corporation Tax after the government announced it wouldn’t be mandated before then.

April 2027: MTD for Income Tax Self Assessment will then apply for businesses, self-employed individuals, and landlords with income over £30,000.

 

If your taxable turnover has not gone above £85,000, you will need to comply with Making Tax Digital in April 2022. From then, the only way to opt out of Making Tax Digital is either on religious grounds (where a business is run by practising members of a religious society or order whose beliefs are incompatible with using electronic communications), if it is not reasonably practicable for you to use digital tools to submit your returns due to location (if you can’t get internet access at your home and you can’t get to another location), or if you have a disability (if you can’t use a computer, tablet, or smartphone for the amount of time it takes to keep digital records). If you believe your business is exempt, you must contact HMRC to confirm.

Keeping your records digitally for Making Tax Digital (MTD) purposes means that you must store a digital copy of the transactions which make up the figures on your VAT return. This needs to be kept in functional compatible software. Functional compatible software is software or a set of software programs which must: record and preserve digital records, send the data to HMRC through the API, and receive information from HMRC via the API. 

Sage is compatible with MTD legislation. In fact, we’ve worked with HMRC on MTD for years to ensure our accounting products make it as easy as possible for you to stay compliant.

If you’re registered for VAT and your taxable turnover is above £85,000, Making Tax Digital was compulsory from April 2019. From April 2022, this will be compulsory for all businesses who are registered for VAT. This means you need to keep digital records and send VAT returns to HMRC digitally using MTD compatible software.

You can still use Excel spreadsheets to calculate VAT but you won’t be fully compliant with MTD. VAT returns have to be submitted through Making Tax Digital compatible software like Sage Accounting or using bridging software that creates a link between spreadsheets and HMRC’s systems.

Sage Accounting helps you meet MTD regulations and it simplifies VAT returns. By swapping your spreadsheets for digital records that are stored in one place and by automating your admin, you can save valuable time. Automatically calculate tax, submit returns straight to HMRC, and use data straight from the bank so that you know your data is always accurate and up to date.

There are three plans for Sage Accounting available on a monthly subscription service. Whichever plan you pick, you’ll get the help you need to stay up-to-date with MTD.
See pricing plans.

If you don’t comply with MTD requirements and you need the criteria, you can get penalties for infringement and late filings. But the good news is that with MTD VAT software, you can meet the regulations easily.

For more FAQs on MTD for VAT software, key dates, and pricing, read our blog.

Not sure what MTD means for you?

Expert advice

Talk to one of our experts today for advice on MTD-compliance and what it means for your business, and discover what Sage Accounting can do for you.

Request a callback
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