Accounting software for Making Tax Digital

Making Tax Digital for VAT is here and business owners need to file VAT returns online using HMRC-recognised software.

Laptop showing Xero software


Automatically calculates the tax you owe (including VAT and payroll tax).


Pulls transaction data straight from your bank, invoicing software, or POS systems.


Updates transactions daily, helping you to stay on top of bank reconciliation.

What is Making Tax Digital?

Making Tax Digital is a government initiative to improve tax administration. Ensure you meet HMRC requirements.

Hands typing on a laptop showing a green tick and text "Submitted to HMRC".

Why you need Making Tax Digital software

All VAT-registered businesses must keep digital records & submit VAT returns using MTD software, like Xero.

Choosing HMRC-recognised MTD software

It’s important to choose software that’s 100% HMRC-recognised, MTD-compliant and easy to use, like Xero.

Benefits of Making Tax Digital software

MTD software can provide additional benefits. For example, Xero automatically records VAT collected and paid.

MTD bridging software explained

MTD bridging software is designed for those who want to keep using spreadsheets instead of full MTD software.

Automate everyday business tasks

Get a real-time view of your financial dashboard from your laptop or mobile.

  • Included
    HMRC recognised
  • Included
    Making Tax Digital ready

Run your business on the go

Use our mobile app to reconcile, send invoices, create expense claims and view reports – from anywhere.

Get paid faster

Xero cloud accounting allows you to send online invoices to your customers – and get updated when they’re opened.

Reconcile in seconds

Xero imports and categorises your latest bank transactions allowing you to make the best use of your time. Just click OK to reconcile.

Try Xero for free

Everything you need to run your business

  • VAT returns

    Xero calculates VAT and files VAT returns online securely with HMRC using software that’s compatible with HMRC systems.

  • Payroll

    Pay yourself and your employees with HMRC-recognised online payroll software. Automate tax, pay and pension calculations.

  • Online invoicing

    Work smarter, not harder with Xero’s intuitive invoicing software. You can log on from your desktop or mobile app and send invoices as soon as the job is done.

  • Bank reconciliation

    Keep your account balances and financials up to date. Easily confirm that the transactions in your bank accounts are recorded in your business financial records with Xero’s bank reconciliation software.

  • Pay bills

    Track and pay bills on time. And get a clear overview of accounts payable and cash flow.

  • Claim expenses

    Capture expense claims, track and manage your employee spend easily, with expense manager tools.

Peace of mind with free support and security

Help is at hand for your business

  • Included
    Xero provides free and unlimited customer support, 24 hours a day, 7 days a week, as part of your Xero subscription.
  • Included
    Switching your existing accounts data to Xero is simple. You can even convert up to 24 months of your accounts for free - a saving of £180.
  • Included
    With more app integrations than any other online accounting platform, Xero lets you integrate your accounts with over 800+ third party solutions.
  • Included
    Xero runs daily online backups of your business information. Your data is encrypted, safe, and secure, giving you ultimate peace of mind.
  • Included
    Run your business effortlessly using the Xero app for iOS and Android. Create invoices, manage cash flow, and snap expenses on the go.
Try Xero for free

I’m able to quote for new opportunities, invoice clients and ensure I’ve paid my taxes seamlessly whilst staying compliant with the government's Making Tax Digital rules.

Ralph Cochrane, founder of Creative Grid

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Your questions answered

MTD for VAT is legislation that requires all VAT registered businesses with a taxable turnover above the £85k threshold to keep their records digitally and submit their VAT Returns using MTD compatible software, such as Xero.

From April 2022 all VAT-registered businesses will have to comply with Making Tax Digital for VAT. Our HMRC recognised software for small businesses helps you do it with confidence.

If you use spreadsheets for VAT, you can still connect to HMRC’s MTD system via Xero. You can use Xero as bridging software that lets you upload VAT amounts, then send MTD VAT standard rate returns from Xero.

Yes, Xero offers a 30 day free trial. You just need to provide your name, email address and a phone number — no payment details are taken.

Yes. You can try features like Making Tax Digital for VAT, Xero Payroll, Xero Expenses and Xero Projects. This lets you experience all of Xero's powerful features while ensuring you get comfortable with the product before you buy.

No, you just need to provide your name, email address and a phone number. We ask for a phone number so that we can get in touch with you directly to help you get started on Xero. If you choose to continue using Xero after your trial, you will be asked to add your billing information and will be billed monthly from that point. If you choose not to continue using Xero, you may delete your organisation in the 'My Xero' section when you login.

Yes, you can try features like Xero Payroll, Xero Expenses and Xero Projects. This lets you experience all of Xero's powerful features while ensuring you get comfortable with the product before you buy. If your bank charges a fee to connect a bank feed to Xero, then you won’t be able to connect the bank feed while you are in your trial.


Try Xero for free

Access all Xero features free for 30 days. Claim your free trial and get started today.

  • Included
    Quick and easy setup
  • Included
    Cancel anytime - no contracts
  • Included
    Free 24/7 support
  • Included
    Add unlimited users
  • Included
    No credit card required
  • Included
    No hidden costs

Explore more MTD news and resources

Making Tax Digital for VAT

All VAT supporting Xero plans cover MTD at no extra cost. Find out more about how Xero and MTD works.

More about MTD for VAT

Making Tax Digital software

Learn more about why you need Making Tax Digital software that’s 100% HMRC compliant.

More about MTD software

Making Tax Digital resources

Explore our MTD webinars, guides, articles, and FAQs for everything you need to know about MTD for VAT.

MTD resources