Posted: 26. November 2019 by: Rupert Tennant

How to Sign up for Digital VAT

HMRC is trying to move all of its work to a digital format, making it easier to apply for and pay taxes in the UK. That has started with registering and paying for VAT since VAT is the most common tax that is paid in Great Britain.

It took a while for the system to be put in place, but now when it’s there, it’s functional, and it’s the only way to pay taxes in the UK, with a few exceptions of technical nature.

Before you start

You need to know a few things before you’re able to start the process of signing up for the digitalization of VAT in the first place. These are there to make sure that you have the tools and software that you need to make the process digital and in accordance with the rules set by HMRC.

Firstly, you’ll need to have the compatible software chosen by HMRC since those software tools are the only ones you can use. Secondly, you’ll need an agent service account that’s used only for VAT is different from your other HMRC service account.

What do you need?

You’ll need to gather a few documents before you’re able to apply for digital VAT, but first, you need to have an email address that you’ll use to stay in contact with HMRC. It can be the same as your business email address, but it doesn’t need to be.

You’ll also need:

-A VAT certificate
-Business entity type (which determines how you pay your taxes)
-Contact details
-A business email address, if you’re using a different one

Depending on what kind of business you’re running, you’re also going to need these documents:

-sole traders – their National Insurance number
-limited companies or registered societies – their company registration number and Unique Taxpayer Reference (UTR) for Corporation Tax
-limited partnerships – their company registration number, UTR, and postcode where they’re registered for Self-Assessment
-general partnerships – their UTR and postcode where they’re registered for Self-Assessment

Signing up

The following step is to sign up for the digital VAT payments once you have all of these documents. You’ll get a confirmation email from HMRC, and that will take 72 hours tops. Once you enter the code from that email, you’re signed up.

Finding the software

The proper software choice is an essential first step for paying VAT digitally since that’s the only way to do it. The government limits the software solutions that you can use since it needs to fit in with some set standards; however, there’s still a wide range of options within that.

Once you’ve chosen the software from the list, you need to create an agent account, and you get to pay your VAT bills online. The problems with the software, if there are any, aren’t something HMRC is responsible for. It’s important to find the software that can suit you as your company grows bigger.

What’s MTD?

Making Tax Digital is the long term initiative made by HMRC. Digitizing VAT is just a small part of it, and it will, at one point, cover all the taxes that you can pay. The process will take years until it’s fully implemented, but when it is, it will make it easier on everyone and make it more transparent.

This process was somewhat confusing, as is often the case when there are new tools and a new set of rules. This happens, and it takes a while for the users to adjust.

The role of an accountant

It’s possible for this work to be done by an accountant on your behalf and HMRC recognizes the role of “agents.”  That’s because most companies leave this work to those who can do it without taking time and energy off more important work.

It’s still allowed for a business owner to complete this process independently, which is how most small businesses that can’t afford large staff are handling their taxes from signing up to paying them. It’s up to you to choose which way you plan to do it.


VAT is one of the most common taxes you have to pay in the UK, and now it’s paid and accounted for completely digitally as a part of the long-term government plan to make all taxed digital. You could apply for becoming a VAT payer online, or your accountant can do that for you, depending on your circumstances.

There are a few documents you need to have in order to make this happen, but they could also be found online, and in the end, you’ll need an email address as well as a valid software solution for collecting your VAT documents.

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