Making Tax Digital for VAT has applied to all VAT-registered businesses since April 2022, regardless of turnover. Most practices have the quarterly submission handled. Where it still goes wrong is the bit HMRC cares about most: how the records are kept.

The two rules that matter

MTD for VAT isn't just "file online". It requires:

  1. Digital record keeping — specified VAT records held in functional compatible software, not retyped from paper each quarter.
  2. Digital links — where data moves between pieces of software, it must move by a digital link, not by manual copy-paste or a retyped figure.

The 9-box VAT return must then be built from those digital records.

What counts as a digital record

For each supply you make and receive, the digital record generally includes:

  • The time of supply (tax point).
  • The net value excluding VAT.
  • The rate of VAT charged.
  • Plus your business name, address, VAT number and the schemes you use.

Keeping the underlying invoices and receipts in digital form — and categorised — is what makes the return trustworthy.

A digital link is any transfer that doesn't rely on a human re-keying a figure: linked spreadsheet cells, an import/export file, an API connection. Copying a number from your bookkeeping into a spreadsheet by hand breaks the chain. If your process still has a manual step between the records and the return, that's the thing to fix.

Schemes change the maths, not the rules

Whether a client is on standard, cash-accounting or the Flat Rate Scheme, the MTD record-keeping obligation is the same — but the figures that land in the 9 boxes differ. Getting the scheme right in your software is what keeps box 1 and box 6 correct.

How BookEnu keeps records clean

BookEnu keeps VAT records digitally from the source document: AI reads each invoice and receipt, captures the net, VAT rate and tax point, categorises the line and stores the original. It then produces the 9-box VAT return for standard, cash-accounting and flat-rate schemes — so the return is built from digital records, with no retyping in the middle.

Getting a practice's VAT records MTD-clean? Apply for early access and we'll walk you through it.

General information, not tax advice. Check current HMRC MTD for VAT guidance for a client's specific circumstances.