Frequently Asked Question

The records that you need to keep to comply with VAT under MTD have not changed. What has change is how you keep them and how you communicate them.

As before, you must keep copies of your invoices or receipts and these can be either paper originals or electronic copies – that’s up to you.

You must keep your records, including the invoices and receipts, for at least 6 years (unless you are operating under special requirements that requires longer).

If you were previously using a spreadsheet or accounting software for your accounts, then it’s likely that you’re already keeping your records digitally as required under MTD – ie you’re keeping them on computer.

How you keep your records:
The important thing with MTD is that all the accounting entries must now be on computer – you can no longer write them into a book manually.

In addition, anything else (eg calculations etc) must also be managed digitally (ie on computer).

The summary information must not be physically re-typed into another software package.

Communication / Submission:
The other important thing in MTD is that submission of your VAT Return to HMRC must also be actioned digitally ie must connect to HMRC via MTD compatible Bridging Software.