MTDfV has been in place since 2019 and we have experienced very few problems. If you are a VAT registered business you have to submit your VAT returns via MTD. It is not an option unless you can show that using a computer is not possible for you.
This means you either have to use “bridging software” or MTD complaint software. Therefore, you need to have your data in a suitable format. Whilst bridging software works and will continue to do so, MTD for Income Tax is coming in for sole traders from April 2026 and with potentially 8 submissions to HMRC per year, bridging software will be a very inefficient way of handling your affairs.
HMRC has produced a list of MTDfV compliant software. If you are using any of the software in this list you probably don’t need to worry too much as your data is already in the correct format. But you will need to create a Business Tax Account If however you are using spreadsheets, non-compliant software or even a handwritten cash book, you must consider your options immediately.
Here at DSSBH our first choice of software is Xero and we can confirm that Xero is on HMRCs list of MTDfV compatible software, and Xero do not intend to make any changes to the subscription. Our clients know that if they use Xero, we include the cost of the subscription as part of the package of services that they subscribe to within the firm. That means we do not need to increase our prices as a result of software requirements for MTDfV. It also means that apart from setting up a Business Tax Account, there is nothing else for our clients to worry about, because we ensure everything else is covered.