Making Tax Digital: The Jargon Buster (Dead Simple Edition)

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Reviewed by a Qualified Accountant

This content has been reviewed by our qualified chartered accountants. However, you should always check with a professional. If you have any questions at all, don't hesitate to get in touch.

Be sure to head over to our Making Tax Digital hub, full of guides, software reviews, important dates and more.

Agent

That’s us, baby 😎

We’re your tax sidekick. We deal with HMRC, submit your VAT returns, and we can handle your Making Tax Digital for Income Tax returns too – whether you’re self-employed, a landlord, or running a side hustle.

Agent Services Account 👨‍💼🔐

This is our official HMRC login that links us to your account so we can file your MTD returns. Nothing you need to set up – we’ve got it sorted.

API-Enabled Spreadsheets 📈🔌

Basically, clever spreadsheets that talk to HMRC. They can file your VAT returns directly, which keeps you compliant and saves time.

Automated Data Transfer 🤖➡️📊

Means your figures move automatically between apps (e.g. bank feeds to Xero) without retyping. It’s like having invisible admin elves.

Cloud-Based Accounting Software ☁️💻

Xero, FreeAgent, QuickBooks – all live online so you can check your numbers from anywhere. No installs, no fuss.

Designatory Data 📝🔍

Just your basic biz info – name, VAT number, address etc. Under MTD, this has to be kept digitally.

Digital Links 🔗🧾

Software systems must connect properly – no copy-and-paste allowed. MTD loves tidy digital handshakes between tools.

Digital Audit Trail 👣🕵️‍♂️

A clear, trackable route from your invoice all the way to your VAT return. HMRC love a good paper (well, digital) trail.

Digitalisation 🖥️📤

The buzzword just means “ditch the paper”. MTD requires your tax records to live in the digital world now.

Digital Records 💾📚

Your invoices, expenses, VAT stuff – all stored online or in accounting software. No more tatty folders stuffed with receipts.

Digital Tax Account (DTA) 🏦💡

Your personal or business HMRC login, where you can view what’s owed, what’s paid, and what deadlines are coming up. (Though let’s face it, we’re checking it for you.)

Domestic Reverse Charge 🏗️🔁

If you’re in construction, this means your customer does the VAT bit, not you. Sounds confusing, but we’ll steer you through it.

Flat Rate VAT Scheme 📉📦

You pay HMRC a flat percentage of your total sales, instead of tracking VAT on every transaction. Easy-peasy – for the right kind of business.

Form 64-8 🖊️📄

This little form lets us act on your behalf with HMRC. Once done, we can handle the boring bits and sort things faster.

Functional Compatible Software 🧩✅

Just means your software is MTD-approved and does what HMRC expects. We’ll recommend the best ones.

HMRC-Recognised MTD Software 🏅💻

Only the good stuff here. We only suggest software HMRC recognises – and we’ve tested the best of the bunch ourselves.

MTD Exemptions 🛑📬

Some people can skip MTD if they have valid reasons (like age, disability, or tech limitations). You’ll need to apply though – it’s not automatic.

MTD Penalties ⚠️💸

HMRC uses a points system. Get enough late submissions or payments and the fines start rolling in. We’ll help you stay squeaky clean.

VAT Notice 700/22 📚🔍

The full official guide to MTD for VAT. It’s… thorough. If you want a summary in human-speak, just ask us.

🎯 Want the easy version of all this?

Head over to our MTD Hub for simple tips, software picks, and answers to your most googled questions:

Or drop us a note. We keep it plain, practical, and totally jargon-free. Promise.