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Which VAT software features do you need?

A general guide, not advice, based on HMRC VAT Notice 700/22.

Features Making Tax Digital requires

  • Digital records: your VAT records are kept in software, which can include a spreadsheet.
  • Digital links: figures move between your records and your software by formulas, file imports or other digital transfers, not by retyping or copying and pasting.
  • Filing through MTD: the software sends your return to HMRC through the Making Tax Digital service and receives HMRC's response. Check the product is on HMRC's software finder.

Accounting software and bridging software both meet these requirements. Bridging software files from records you keep in a spreadsheet.

Features that save time and avoid penalties

  • Checks before you submit: a return cannot be changed once it is sent, so look for checks such as Box 3 and Box 5 being worked out for you and Boxes 6 to 9 in whole pounds.
  • Your VAT periods and due dates from HMRC: so you file the right period and know when it is due.
  • Reminders before each deadline: a late return earns a penalty point.
  • Plain-English error messages: HMRC's error codes are hard to read. Good software tells you what to fix.
  • Amounts owed and payments: a view of what HMRC says you owe and what you have paid.
  • Receipts: HMRC's receipt reference for every return you file.
  • Support from a person: chat, email or phone when something goes wrong near a deadline.

Features that depend on how you work

  • Invoicing, bank feeds and bookkeeping: useful if you want to replace your spreadsheet. These are features of accounting software.
  • Several businesses or clients: accountants and owners of more than one business need one login for all of them, and team members with their own logins.
  • Agent access: agents need to file for clients linked to their agent services account.
  • Price: check the yearly cost, not just the monthly price, and whether each extra business costs more.

Features to be careful about

  • Claims you cannot check: look for clear information on where your data is kept and how you sign in to HMRC, rather than vague claims.
  • Retyping figures: any tool that needs you to type your nine box totals by hand does not keep a digital link.
  • Your Government Gateway password: software should send you to HMRC's own page to sign in. It should never ask you for your password.

Bridging software or accounting software?

If your records already work in a spreadsheet, bridging software gives you every feature MTD requires for less. If you want invoicing, bank feeds and bookkeeping in one system, choose accounting software, which files your VAT return too. See bridging software vs accounting software.

Every feature MTD requires, from £5 a month

Swift VAT Pro files from your spreadsheet, with the checks, due dates, reminders and help that keep you out of penalties.

  1. Connect to HMRC on HMRC's own page with your Government Gateway sign-in. We never see that password.
  2. See your VAT periods, due dates, amounts owed and payments, read from HMRC.
  3. Upload your nine box totals as a CSV. Box 3 and Box 5 are worked out and every box is checked.
  4. Submit and keep HMRC's receipt. Reminder emails arrive before each due date.
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No card needed · From £5 a month · Plans for up to 100 businesses · Filing through HMRC's MTD service since 2019

Final thoughts

Start with what MTD requires, digital records, digital links and filing through MTD, then add the features that protect you: checks, due dates, reminders and help. Pay for bookkeeping features only if you will use them.

Disclaimer: This guide gives general information, not advice for your business. If you are unsure how the rules apply to you, speak to an accountant or contact HMRC.

Frequently asked questions

Checked against HMRC VAT Notice 700/22, VAT Notice 700/21, HMRC's software finder and Swift VAT Pro's current features. November 2026.

What features does MTD VAT software need?
It must work with digital records that are digitally linked, and send your VAT return to HMRC through the Making Tax Digital service. Check the product is on HMRC's software finder.

Can I use a spreadsheet for Making Tax Digital?
Yes. A spreadsheet can hold your digital records, as long as figures move by formulas or file transfers rather than retyping, and you file through bridging software.

Do I need invoicing and bank feeds in VAT software?
No. They are bookkeeping features of accounting software. They help if you want to replace your spreadsheet, but Making Tax Digital does not require them.

What features help avoid VAT penalties?
Checks before you submit, your VAT periods and due dates from HMRC, reminders before each deadline, and clear explanations when HMRC rejects a return.

What should accountants look for in VAT software?
All clients in one account, a login for each team member, filing for clients linked to their agent services account, and a price that works per client.

Every feature MTD requires, from £5 a month.

Swift VAT Pro files your return to HMRC from the spreadsheet you already keep. From £5 a month.

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No card needed · 2,900+ VAT returns filed since 2019