How to Submit Your VAT Return Using Making Tax Digital
Making Tax Digital (MTD) for VAT is HMRC's programme requiring VAT-registered businesses to keep digital records and submit VAT returns using MTD-compatible software. Since April 2022, all VAT-registered businesses must comply with MTD for VAT, regardless of turnover[1]. This guide explains who must comply, what software you need, and how to submit your VAT return step by step.
Who Must Comply with MTD for VAT?
As set out in HMRC's MTD for VAT guidance, MTD for VAT applies to all VAT-registered businesses. Since April 2022, this includes businesses with taxable turnover below the VAT registration threshold. The current VAT registration threshold is £90,000 per annum (from April 2024)[2]. Even if you registered for VAT voluntarily with turnover below this threshold, you must still use MTD-compatible software for your VAT returns.
What Software Do You Need?
HMRC requires that VAT returns are submitted using software that is compatible with Making Tax Digital[3]. There are two types of MTD software:
- Full accounting software – packages that handle all your record-keeping and VAT return submission in one system.
- Bridging software – tools that take VAT figures from spreadsheets or other records and submit them digitally to HMRC[4]. This is ideal for businesses that prefer to keep their own spreadsheets.
DIY Accounting provides a free MTD VAT submission service at submit.diyaccounting.co.uk that acts as bridging software. It connects directly to HMRC's Making Tax Digital API, allowing you to submit your VAT return figures from your DIY Accounting spreadsheet without any additional cost.
Step-by-Step: Submitting Your VAT Return
Follow these steps to submit your VAT return through Making Tax Digital:
- Keep digital records throughout the VAT period. Record all sales and purchases in your DIY Accounting spreadsheet. HMRC requires that you maintain digital records of your VAT transactions[5].
- Calculate your VAT return figures. At the end of each VAT period, your DIY Accounting spreadsheet automatically calculates the nine boxes of the VAT return: total VAT due on sales (Box 1), VAT due on acquisitions from EU member states (Box 2), total VAT due (Box 3), VAT reclaimed on purchases (Box 4), net VAT to pay or reclaim (Box 5), total value of sales excluding VAT (Box 6), total value of purchases excluding VAT (Box 7), total value of supplies to EU member states (Box 8), and total value of acquisitions from EU member states (Box 9)[6].
- Sign in to the submission service. Visit submit.diyaccounting.co.uk and sign in using your Government Gateway credentials. This authorises the service to communicate with HMRC on your behalf.
- Select the VAT period. The service retrieves your outstanding VAT obligations from HMRC and presents the available periods for submission.
- Enter your VAT return figures. Transfer the nine box values from your spreadsheet into the submission form. Double-check each figure against your spreadsheet calculations.
- Review and submit. Before submitting, you must confirm a legal declaration that the information is true and complete to the best of your knowledge. Once you submit, HMRC provides a receipt with a unique reference number.
- Keep your records. Store the submission receipt alongside your spreadsheet records. HMRC requires you to keep VAT records for at least 6 years[7].
Common Questions
Can I still use spreadsheets for my VAT records? Yes. HMRC allows businesses to keep digital records in spreadsheets, provided the VAT return itself is submitted through MTD-compatible software. Bridging software like the DIY Accounting submission service handles the digital link between your spreadsheet and HMRC.
What if I make a mistake? If you discover an error after submission, you can correct it on your next VAT return if the net value of errors is below £10,000 (or between £10,000 and £50,000 and less than 1% of the Box 6 figure)[8]. Larger errors must be reported to HMRC separately using form VAT652.
When are VAT returns due? Most businesses submit VAT returns quarterly. The return and any payment are due one calendar month and seven days after the end of the VAT period[9]. See our companion article on MTD VAT Return Deadlines and Penalty Points System for full details.
Article generated by Claude Code for DIY Accounting, February 2026. All information sourced from GOV.UK and HMRC guidance linked inline.
Tax reference: Making Tax Digital for VAT submission – Sources: GOV.UK: VAT Returns, GOV.UK: Making Tax Digital software (applicable tax year 2025/26)
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