Making Tax Digital VAT Accountants in London
Written by Sharaz Zaman, Founder of GM Professional Accountants, AAT Member, London accountant since 2012.
Key Takeaways
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If your business is VAT registered in London, Making Tax Digital already applies to you. Since April 2022, every VAT registered business has been required to keep digital records and file VAT returns using HMRC approved software, and the registration threshold for 2026/27 sits at £90,000 of taxable turnover in any rolling 12 month period. Our AAT registered team prepares and files MTD VAT returns for clients across London and Essex, so your figures stay accurate and your deadlines are never missed.
Making Tax Digital for VAT is HMRC’s requirement for VAT registered businesses to keep digital accounting records and submit VAT returns using approved software, replacing manual and paper based submissions with continuous, real time digital reporting to HMRC.
What Is Making Tax Digital for VAT and Who Does It Apply To?
Making Tax Digital for VAT applies to every VAT registered business in the UK, not just larger companies. According to HMRC’s official guidance, this has been mandatory for all VAT registered businesses since April 2022, whatever your turnover. That includes sole traders, limited companies, landlords with a VAT registered property business, and construction firms operating under the domestic VAT reverse charge. If you invoice for VAT in London, whether you run a shop in Old Street or manage rental property in Wimbledon, MTD rules already apply to you.
When Do I Need to Register for VAT in London?
You must register for VAT once your taxable turnover passes £90,000 in any rolling 12 month period, or if you expect to exceed this threshold in the next 30 days alone. You have 30 days from the date you cross the threshold to notify HMRC. Voluntary registration is available if your turnover sits below £90,000, which can help you reclaim VAT on business expenses, and de-registration is possible if turnover later falls below the de-registration limit.
| 1 | Register with HMRC online, providing your business turnover, bank details and business activity. |
| 2 | Receive your VAT registration number and effective date of registration from HMRC. |
| 3 | Set up MTD compatible software and link it to your HMRC business tax account. |
How Does Making Tax Digital for VAT Actually Work?
Under MTD, HMRC receives your VAT information digitally through approved software rather than a manual online form. Your sales, purchases and expenses need to be recorded digitally, and a digital link must exist between where the data is first recorded and where it is submitted to HMRC. This means copying figures manually between spreadsheets and submission tools is no longer compliant. For businesses in construction working under the domestic VAT reverse charge, or SPV property companies managing rental income, this digital link requirement often needs the most attention when setting up software correctly.
What VAT Schemes Can London Businesses Use Under MTD?
Choosing the right VAT scheme affects both your bookkeeping workload and your cash flow. The table below sets out the main options available to VAT registered businesses in London and Essex.
| Scheme | Best Suited To | Key Feature |
| Standard VAT Scheme | Most VAT registered businesses | Reports sales VAT minus purchase VAT each quarter |
| Flat Rate Scheme | Small businesses with low expenses, turnover under £150,000 | Fixed percentage of turnover paid, simpler bookkeeping |
| Cash Accounting Scheme | Businesses with cash flow pressure or late paying clients | VAT accounted for when paid, not when invoiced |
| Annual Accounting Scheme | Stable turnover businesses wanting fewer submissions | One annual return with interim payments on account |
What Happens If I Miss an MTD VAT Deadline?
Late or inaccurate VAT returns can trigger HMRC’s points based penalty system, with charges ranging from fixed fines to interest on late payments. Our detailed guide on penalties for late MTD filing in London sets out exactly how the points system works and how landlords and small businesses can avoid triggering it.
Which MTD Software Should I Use?
HMRC requires MTD compatible software to submit VAT returns digitally, and the right choice depends on your business size, sector and budget. Landlords in particular often ask which package suits multiple rental properties. Our MTD software comparison guide for London landlords breaks down the leading options by feature, pricing and ease of use.
What Are the Key MTD Deadlines for 2026 and 2027?
MTD for Income Tax Self Assessment begins in phases. From 6 April 2026, self-employed individuals and landlords with qualifying income over £50,000 must keep digital records and submit quarterly updates. This drops to £30,000 from April 2027, meaning many more London sole traders and landlords will be brought into scope. Our full breakdown in MTD deadlines explained for 2026 lists every relevant submission date so nothing catches you out.
How Can a Local London and Essex Accountant Help With MTD VAT?
A local accountant who understands London and Essex business patterns can set up MTD software correctly the first time, manage your digital VAT records ongoing, and represent you if HMRC opens a VAT inspection. We work with construction firms managing CIS deductions, SPV property companies, and healthcare professionals balancing NHS and private income. We proudly serve clients across London and Essex, with teams supporting businesses in Ilford, Old Street, Wimbledon and Canary Wharf.
FAQs – MTD VAT Accountants in London
| Do I need to register for VAT in London? |
| If your business turnover hits £90,000 in a rolling 12 month period, you must register for VAT. Voluntary registration below this threshold can help you reclaim VAT on expenses. |
| What happens if I submit a VAT return late? |
| Late submissions can trigger HMRC’s points based penalty system alongside interest on unpaid VAT. Staying MTD compliant and filing on time keeps your business clear of fines. |
| Which businesses are exempt from Making Tax Digital? |
| Exemptions are limited and granted case by case, usually on grounds of age, disability, remoteness, or religious belief. Most VAT registered businesses in London have no exemption available. |
| Can I still use spreadsheets for MTD VAT? |
| Yes, provided your spreadsheet is linked to HMRC recognised bridging software through a digital link, rather than figures being retyped manually into a separate submission tool. |
| Does GM Professional Accountants cover Ilford, Wimbledon and Essex? |
| Yes, our AAT registered team supports VAT registered businesses and landlords across London and Essex, including Ilford, Old Street, Wimbledon and Canary Wharf, in person and remotely. |
| What is changing with MTD for Income Tax in 2026? |
| From April 2026, self-employed people and landlords with qualifying income over £50,000 must keep digital records and submit quarterly updates to HMRC, with the threshold dropping further in later years. |
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Disclaimer: This content is for general guidance only and does not constitute financial or tax advice. Tax rules change and how they apply depends on your individual circumstances. Please speak to a qualified accountant before acting on anything here.
