What is the best way to fill out an MTD VAT Return by using the MTD services?

After you’ve registered to VAT, you’ll need to file your tax returns every month and make them available to HMRC. Here’s how.

What is exactly Tax Digital (MTD)?

MTD means that you need to submit your VAT returns using an accounting software that is recognized by HMRC to file tax returns like Xero. This means that you can no more submit VAT returns on hand.

The application was made mandatory for VAT periods that begin from or after 1st April 2022.

Once their systems are operational, many business owners find it to be more efficient and quicker to calculate and the Filing vat returns online with MTD software.

Where do I sign up with Making Tax Digital?

It is vital to install the right software before joining. In order to sign up, you must possess :

  • your business email address
  • An Government Gateway user ID and password. If you do not have an account that has an ID or password for a user then you can make one using the service.
  • You must have your VAT registration ID, as well as your most recent return for VAT

There may be additional requirements to sign up. Follow the link to find out more information.

When to sign up:

If you already pay VAT via direct debit, make sure not to sign up too close to the day when your tax return is due, or you might have to be charged twice. To avoid this avoid that, don’t register at a rate that is less

Seven days in advance of the due date of your return

Five days after your return date is the due date.

If you don’t pay by direct debit, ensure that you register at minimum three days before the due date.

Methods for submitting VAT

Software for accounting

Beginning in April, 2022, all VAT registered businesses will have to implement an MTD program regardless of their revenue. Learn more about the process of making Tax Digital.

Software for Spreadsheets, MTD Bridging and spreadsheets

If you use Excel spreadsheets for calculating VAT, you’re capable of connecting directly to HMRC MTD system using Xero. You can utilize Xero to act as bridge program which allows you to upload VAT figures and then later send regular VAT returns in the form of MTD in the direction of HMRC.

VAT due dates

The due dates for your tax return will be determined by the date you registered to VAT, as well as the accounting software you are using. A majority of companies must file annual tax return every quarter. The specific dates through HMRC and then look it up in your online VAT account.

Tax Paying to HMRC

If you’re facing an unpaid VAT bill, usually, you’ll be able to pay it in one calendar month, with the option of seven days to pay. You can pay this amount making use of bank accounts online, debit cards and credit card. However, the most effective method is to set up direct debit. This enables HMRC to deduct VAT that you owe on your bank account when the due date arrives. Learn more about how to pay online for VAT by reading our instructional.

If you miss your deadline, you may face penalties.

Receiving VAT refund

If you’ve received more than you earned, HMRC will owe you some money. The tax will be paid within 10 working days following the date of filing the tax returns. Make sure you have the bank information.


This guide is intended for the public for information purposes only. It is highly recommended to speak with your professional advisors for specific advice regarding your business or prior to taking any action related to any of the advice provided.