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Do you need MTD VAT software as a sole trader?

A general guide, not advice, based on GOV.UK guidance on VAT registration and MTD exemptions.

When a sole trader must register for VAT

  • Over £90,000: you must register if your VAT taxable turnover goes over £90,000 in any rolling 12-month period, or you expect it to go over in the next 30 days alone.
  • Turnover, not profit: the threshold is based on your taxable sales, not what you earn after expenses.
  • Voluntary registration: you can register below the threshold, which lets you reclaim VAT on business costs but means charging VAT on your sales.

See when to register for VAT for the detail.

Do sole traders need MTD VAT software?

Yes, if you are VAT registered. Every VAT-registered business must keep digital records and send VAT returns through software that works with Making Tax Digital, whatever its turnover. That includes sole traders and businesses that registered voluntarily.

Who is exempt from Making Tax Digital for VAT

  • Exempt without applying: businesses in an insolvency procedure, and businesses that have cancelled their VAT registration but still need to send a final return.
  • Can apply for an exemption: if it is not reasonable or practical for you to use computers, software or the internet because of your age, a health condition, a disability or where you live, because you object to using computers on religious grounds, or because you do not have internet access.
  • How to apply: call or write to HMRC. Keep sending returns as you do now until HMRC replies.

Your options for filing

OptionWorks ifTypical cost
Spreadsheet and bridging softwareYou already keep your records in a spreadsheetLow: Swift VAT Pro is £5 a month or £50 a year
Accounting softwareYou want invoicing, bank feeds and bookkeeping tooHigher monthly fee, files VAT as well
An accountant files for youYou would rather hand it overAccountant's fees

Filing your own VAT return as a sole trader

  1. Record every sale and purchase in your spreadsheet, with the date, value and VAT.
  2. Total the nine VAT boxes with formulas. Linked cells count as a digital link. Typing totals in by hand does not.
  3. Save the VAT summary as a CSV and upload it to your bridging software.
  4. Check and submit. Keep HMRC's receipt reference.
  5. Pay by the deadline, 1 calendar month and 7 days after the end of the VAT period.

For a step-by-step spreadsheet setup, see how to submit VAT from Excel or CSV.

Common sole trader mistakes

  • Checking profit against the threshold instead of taxable turnover.
  • Retyping figures into the return, which breaks the digital link.
  • Mixing up VAT and Income Tax. MTD for Income Tax is a separate set of quarterly updates for sole traders over the income threshold. See VAT returns during MTD for Income Tax.
  • Leaving it to the last day. A late return earns a penalty point, and reaching the threshold brings a £200 penalty.

VAT-registered sole trader? File from your spreadsheet, from £5 a month

Swift VAT Pro is MTD bridging software. Keep your records in your spreadsheet and file your own VAT return without an accountant.

  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.
Start your 7-day free trialSee how it works

No card needed · From £5 a month · Plans for up to 100 businesses · Filing through HMRC's MTD service since 2019

Final thoughts

If you are a VAT-registered sole trader, you need MTD software unless HMRC has agreed you are exempt. If your records already live in a spreadsheet, bridging software is the simplest and cheapest way to stay compliant and file your own returns.

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 GOV.UK VAT registration guidance, GOV.UK guidance on exemptions from Making Tax Digital for VAT, VAT Notice 700/22 and HMRC's software finder. November 2026.

Do sole traders have to register for VAT?
Only if VAT taxable turnover goes over £90,000 in any rolling 12 months, or is expected to go over in the next 30 days alone. You can register voluntarily below that.

Do VAT-registered sole traders need MTD software?
Yes, unless HMRC has agreed you are exempt. Every VAT-registered business must keep digital records and file VAT returns through software that works with Making Tax Digital.

Can a sole trader use a spreadsheet for MTD?
Yes. Keep your records in a spreadsheet, total the nine boxes with formulas, and file through bridging software by uploading a CSV. Typing totals in by hand breaks the digital link.

Who can be exempt from MTD for VAT?
Businesses in an insolvency procedure, and those sending a final return after cancelling registration, are exempt. You can apply if it is not reasonable or practical to use computers or the internet because of age, health, disability, where you live, religious beliefs or no internet access.

Can I file my own VAT return without an accountant?
Yes. Many sole traders file their own returns from a spreadsheet using bridging software, which checks the figures before they go to HMRC.

VAT-registered sole trader? File your own return from £5 a month.

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

Start 7-day free trial Check if you need MTD software

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