TL;DR — the key facts
What you need to know
The UK standard VAT rate is 20%, with a 5% reduced rate for domestic fuel and power, children's car seats, and some other goods. Businesses with taxable turnover above £90,000 must register.
MTD for VAT requires all VAT-registered businesses to keep digital records and submit returns via HMRC-recognised software. Manual entry into HMRC's online portal is no longer allowed.
A full VAT invoice is required for all B2B supplies. Simplified invoices (no buyer details required) are allowed for supplies under £250 to VAT-registered customers in some cases.
Timeline
April 2019
MTD for VAT mandatory for businesses above the then-£85,000 threshold.
April 2022
MTD for VAT extended to all VAT-registered businesses regardless of turnover.
April 2024
VAT registration threshold raised from £85,000 to £90,000.
April 2026
MTD for Income Tax Self Assessment (ITSA) — Phase 1: self-employed and landlords with income above £50,000.
April 2027
MTD for ITSA Phase 2: income above £30,000.
VAT and invoicing compliance
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£90,000 of taxable turnover in any rolling 12-month period (raised from £85,000 in April 2024). You must register within 30 days of exceeding this threshold. You can voluntarily register below the threshold.
MTD for VAT is mandatory for all VAT-registered businesses — you must use HMRC-compatible software to keep digital records and submit returns. You can no longer manually enter return data into the HMRC portal. MTD for Income Tax applies from April 2026 for self-employed individuals and landlords with income above £50,000.
Your business name, address, and VAT registration number; the buyer's name and address; a unique sequential invoice number; the invoice date; description of goods or services; the VAT rate and VAT amount; the total excluding VAT; and the total including VAT.
Standard rate is 20%. A 5% reduced rate applies to domestic energy and power, children's car seats, contraceptive products, and some renovation work. Zero-rate applies to most food, children's clothing, books, and exported goods.
Most businesses file quarterly. Monthly returns are available on request and are useful if you regularly receive VAT refunds. The return and payment are due 1 month and 7 days after the end of the period.
