Submit your UK VAT return using Excel

The MTD may be revolutionizing the VAT return filing process in the UK, but you can still use your Excel spreadsheet to make digital submissions to the HMRC. Check out these easy steps to discover how!

Submit your UK VAT return using Excel

Value Added Tax, simply known as VAT is a type of tax that applies to goods and services consumed by end users. For this reason, VAT is commonly referred to as consumption tax. In the UK, VAT is levied on both businesses and individuals. The fact that individuals engage in the purchase of goods and services makes them taxable for VAT. Generally, UK VAT is charged to individuals by businesses that supply goods or offer services. Businesses on the other hand are liable to pay VAT to the appropriate authorities, and also charge VAT on goods or services they supply. VAT is one of the government’s most important revenue sources and takes up to 6% of the national revenue. But not only the government benefit from VAT charges. Business owners who charge and pay VAT discharge their VAT payment obligations by remitting the difference between the VAT paid for their purchases and those they charge their customers. So, businesses registered for VAT can mitigate the amount they have to pay for their purchases.

Charging VAT, whether as an individual or a business owner is only eligible to those who have registered for VAT. For businesses, the UK taxation policy mandatorily requires businesses recording over £85,000 in turnover to pay VAT. However, the law does not restrict voluntary VAT registrations for businesses with lower turnover rates. As a VAT-charging-businesses, the VAT you charge must be included in the invoice you issue to businesses making purchases with you. As individuals, the requirement to pay VAT depends on the number of your taxable supplies. Also, if you are registered for VAT you are obviously required by law to pay VAT. Non-established taxable persons (NETPs), referring to persons who are not physically present or resident in the UK fall under the VAT obligation threshold if their businesses include taxable supplies in the UK

However, UK VAT law creates exemptions to supplies deemed taxable. This applies to supplies that are excluded under the legally specified scope of taxable supplies. Such supplies include specific leases of buildings or land, insurance, business transactions involving credit provisions, specific areas of education and training, charity ventures, betting and lotteries, and medical services rendered by doctors and dentists.

What Is MTD?

MTD stands for Making Tax Digital. It is the HMRC’s initiative to digitize the UK’s taxation system. Coming into force in 2019, MTD has overhauled the UK’s tax filing process, and when it comes to filing tax returns, MTD does not leave out VAT. The government’s intention for introducing the MTD tax filing regime is to facilitate effectiveness and efficiency for businesses while handling their day-to-day transactions and accounting. Specifically, the MTD’s digital record-keeping makes obsolete the traditional style of using non-digitized spreadsheets. Today, with MTD disruptions, businesses can easily generate and directly update their tax return portfolio with the HMRC.  

The revolutionary effect of the MTD’s inception is the over one million small businesses that fall under the threshold requirement of £85,000 to register for VAT. Putting this in perspective, the HMRC issued an MTD-compliance deadline for April 2022 to businesses running taxable supplies in the UK. The breach of this compliance leads to a fine payment. To ease the business transition process, the UK’s HMRC provides a list of MTD-compatible software options. VAT Filer, AvadaVAT, BTC PM Solution, Capium, Systematics, VAT Pro, LOVAT, VAT-Web, and VATpac 300 are some of the HMRC-approved software businesses can leverage to file their VAT return.

What’s the first step in Making Tax Digital for VAT to file your tax returns?

Choosing the right MTD-compatible software is the first step you have to take. Before you hap on any of the MTD solutions listed above, be sure to check out certain important features. First, the interface should present you with readable and understandable language to avoid errors in calculation. Also, to automate the filing process, you should go for applications with features for standardizing recurring transactions. This will help you to save time when you input transaction data. If you run a chain of businesses, the software you choose to file your VAT return should have a unifying feature that helps you monitor and calculate all transactions from multiple businesses simultaneously.

How do I file a VAT Return?

If your business type does not fall under the categories excluded from VAT charges you must not only file your VAT return through MTD-compatible software to show compliance, but you should learn to do it with the proper digital tools. There are several complex accounting software you could use to calculate your VAT return. However, if your business used the Excel spreadsheet to file your UK VAT returns, you don’t have to abandon it for new MTD-compatible software.

What you need is bridging software. Filing your VAT return using Excel Spreadsheet takes you as far as recording your transactions electronically but it doesn’t provide online submission options to the HMRC database. This is where bridging software comes in.

Bridging software like ANNA is an MTD-compatible software providing you with digital options for filing your VAT return. All you have to do is to upload your Excel spreadsheet on ANNA and your Vat return will be submitted to HMRC for free. ANNA also provides other tax filing services including automating your VAT return calculations. To make things easier, you can complete your VAT return filing directly from Excel by using a software add-in for VAT filing.

This works like a Grammarly add-in for MS Word. You can simply download a VAT filing template of an MTD-compatible filing software like ANNA, and install the add-in by following the instructions provided. You can then use the VAT filing add-in directly on Excel. Once you’ve computed your transaction data on the Excel spreadsheet, you proceed to open the add-in. the add-in automates your VAT return calculation and connects to HMRC for submission. If you are still at loss on how to use an Excel VAT filing add-in, you can learn by watching add-in template simulations online.


The advent of MTD in the UK’s tax return filing system is another plus for digital transformation in business, economics, and governance. The HMRC provides several MTD software to automate and submit your VAT return but if you choose to stick to the Excel spreadsheet, you can still navigate the application to make your file your VAT return digitally.

Barry Caldwell

Barry Caldwell

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