You're asking exactly the right questions, and yes — your understanding of the essentials is correct.
**What you need to do each quarter**
- Keep digital records. Under Making Tax Digital for VAT, you must record all your business income and expenses digitally — sales invoices, purchase invoices, and the VAT charged and paid. HMRC expects records to be kept in MTD-compatible software (or a combination that is digitally linked).
- 2. Submit your VAT return through the software. Every quarter, the VAT return is generated from those digital records and filed directly with HMRC from within your MTD-compatible software. The old approach of logging into the HMRC portal and typing the figures in manually is no longer accepted.
Spreadsheets on their own are no longer enough. You can still use spreadsheets, but only if they are connected to HMRC via bridging software that creates a digital link — data must flow digitally without manual retyping. If your spreadsheet setup can't do that, it's time to move to proper accounting software.
**Deadlines**
You have 1 month and 7 days after the end of each VAT quarter to both submit the return and pay any VAT due — both land on the same date. So for a quarter ending 31 March, your return and payment are due by 7 May. Your exact quarter dates are set by HMRC and shown in your VAT account, so double-check those first.
Missing the deadline risks a late-submission penalty under HMRC's points-based system, plus interest on late payment, so it's worth setting a reminder a week or so before each deadline.
My honest advice: get the software set up properly now and run it every week rather than leaving the quarter-end as a scramble. It makes the first return far less painful than most people expect.
