In a nutshell, the idea behind MTD is that business' VAT returns will no longer be submitted by manually entering figures into a return on your Government Gateway online account. Instead the figures will be taken to HMRC's Application Programme Interface (API) platform by linking your general accounting software and/or other digital records to this platform. Apparently the reason behind this is because HMRC believe this will help solve the "VAT Gap" (personally I'm dubious, but I'm sure its worth a go!).
Essentially, this means that, for VAT return periods which start on or after 1 April 2019, businesses will need to ensure that the software they use can both supply and receive information digitally via HMRC's API platform.
Obviously the degree of pain this will cause you will depend on your software supplier, general systems, and what your VAT calculation actually involves...
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