What is MTD for VAT?
Last verified 31 October 2026
MTD for VAT is the existing Making Tax Digital service for VAT-registered businesses, who keep VAT records and submit VAT Returns using compatible software. It is a separate service from Making Tax Digital for Income Tax.
Why it matters to landlords
HMRC's guidance says all VAT-registered businesses should now be signed up to MTD for VAT, and that HMRC signs up new VAT-registered businesses automatically unless they are exempt or have applied for an exemption. So a landlord who also runs a VAT-registered business is probably already using it.
The two services run side by side. MTD for Income Tax covers self-employment and property income through quarterly updates and a final declaration, while MTD for VAT covers VAT Returns. HMRC's software guidance tells VAT-registered people to check whether their VAT software is also compatible with MTD for Income Tax, or whether the product they choose meets their VAT needs. Residential rental income and VAT registration are separate questions, so being signed up to one does not sign you up to the other.
Example
Priya lets two flats and also runs a VAT-registered design business. Her VAT Returns already go through VAT software. From April 2027, if her qualifying income is over £30,000, she must also send quarterly updates for her flats and her design business. She checks whether one product can do both, or whether she needs to keep two.
MTD for Sole Traders With Rental Income (2026) →
Related terms
- Making Tax Digital (MTD)
- MTD for Income Tax (MTD ITSA)
- MTD compatible software
- Qualifying income
- MTD income sources