MTD: Filing your VAT Return from Excel – we compare the best free options

Making Tax Digital (MTD) is a key part of the government’s plans to digitise the tax service and make it easier for people and businesses to get their tax right. It’s a move away from paper records towards keeping a digital trail. 

Since 2019 all VAT registered businesses with a taxable turnover of more than £85,000 have been required to comply with MTD by keeping their records digitally and filing their VAT returns through MTD-approved software. 

There were also some businesses that voluntarily registered for MTD, even though their turnover was below the threshold. 

Changes are coming. By April 2022 ALL VAT registered businesses will need to sign up to MTD for VAT, even if their turnover is less than £85,000  (you don’t have to wait until April and can register now if you want to get a head start). 

This change means that there are lots of small businesses that don’t use an accountant, who suddenly need to file their VAT returns through MTD-compliant software. This may be a challenge for businesses that currently use a simple Excel spreadsheet to calculate how much VAT they owe. 

But there is a solution: there are a number of services which allow businesses to file their VAT return directly from an Excel spreadsheet, in a way that’s MTD compliant. 

So with that in mind, we thought we’d compare some of the free MTD-compliant tools for filing your VAT return. We looked at how easy they were to use, which Excel templates they provided, whether you had to register, if they allowed you to see your filing history, and a host of other factors, to find out which service was the best. 

Portico

Portico is a free, online service that requires registration. 

We found Portico a little tricky and overcomplicated. You’re required to upload a CSV file in quite a complicated format, including the 9-box amounts, but there is no guidance about how to do this, so you only find out you’ve done something wrong when you get an error message at the end. You can type your 9-box values directly into the web browser, but this may not be MTD-compliant as it breaks the digital link between the original files and the VAT return. 

In its favour, it does have accounting features such as the ability to log expenses and income for your VAT return or self assessment but this must be done manually – it can’t extract information from receipts or invoices. It also gives you deadline notifications and you can access your VAT filing history. 

 

100PcVatFreeBridge

100PcVatFreeBridge is a distinctly old-school piece of software for PCs, Macs and Linux. It’s not cloud-based, so your information remains on your hard drive, rather than online. No registration is needed.

For 100PcVatFreeBridge to work, you need to follow the developer’s fairly specific instructions, which include naming your Excel fields (you can use .xls or .xlsx files). It’s complicated enough that they recommend you watch a 15-minute tutorial before getting started.

One big drawback is that the VAT calculations aren’t automatic, so you’ll need to tally up the 9-boxes yourself before you begin. 

It doesn’t inform you of deadlines, but on the bright side, it does allow you to access your VAT filing history.

 

Vatify

Vatify is an online service that requires registration. You download an Excel template, paste in your 9 box totals and then upload and file your VAT return. You can use .csv or .xlsx files.

The layout and design are confusing and instructions could be much clearer.  There is no mention of needing to register for Making Tax Digital, so users might well miss out this vital step. 

The template does not do any calculations on your behalf, so you have to work out your totals before putting them in the 9 boxes. 

As with other services we’ve looked at, it does allow you to see your VAT filing history.

 

SafeAccounts

SafeAccounts is a cloud-based online service. It allows you to upload a .csv or plain text file containing just your 9 box information within.

Instructions are text-heavy and could be clearer, but they do remind users that they need to register with HMRC. 

Security around the service is cumbersome, and you have to re-enter your VAT number every time you use it, but it does adhere to MTD rules by preventing you from editing VAT amounts in the browser. 

 

MTDsorted

MTDsorted is a sleek, modern-looking online service that requires registration. 

It doesn’t provide you with any kind of Excel template, so you’ll have to know how to create your own spreadsheet and fill in the 9 boxes yourself. You can use .xls or .xlsx files. It has a neat and useful preview facility and sends confirmation when you’ve submitted your VAT return. As with many of the other services, you can review your filing history, and it also has deadline reminders. 

MTDsorted does allow you to overwrite the information in your 9 boxes, which is a concern as it may not be MTD-compliant (as we mentioned earlier, it breaks the digital link between the files and the VAT return).

 

TaxOptimiser

TaxOptimiser is an online service that allows you to download a template .xls file or use a file you’ve created for yourself. You can then upload and file you VAT Return from a template.

The TaxOptimiser website is nicely designed and easy to navigate, but feels like it’s aimed at accountants, rather than members of the public. A lot of terminology (“Period Key” and “Audit Log” for example) may be confusing to people who don’t have a financial background.

There are two downloadable Excel templates set up for automatic calculations. The ‘smart’ template requires net amounts inputted, so you’ll need to have every original receipt or invoice with the exact VAT and net amounts to hand in order to input your sales and expenses.

As with similar services, you can access your VAT filing history. 

Note: the first year of TaxOptimiser use is free and after that you are required to pay.

 

ANNA

ANNA offers a range of online services, including VAT filing. You don’t have to register, but if you create an account you can see an ongoing record of your VAT filings, and all your details are stored for future use. ANNA provides handy Excel spreadsheets with calculations built-in (or you can use your own template, in .xls or .xlsx format) and also reminds you of filing deadlines.

Of all the services we tried, ANNA was the easiest to use. The design is simple and straightforward, and it’s intuitive rather than needing pages of instructions. It does what you need with the minimum of stress or fuss.