---
title: "Making Tax Digital: what you actually need to do"
description: "Making Tax Digital: what you actually need to do"
---

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# Making Tax Digital: what you actually need to do

## The MTD connection and what MTD prohibits - explained

Making Tax Digital (MTD) for VAT requires using compatible software to keep records and submit returns. Xero is MTD-compatible, so this requirement is met automatically once the connection is set up.

### The MTD connection

We connect your Xero to HMRC's MTD system during VAT registration. This involves a one-time authorisation through your HMRC Government Gateway account. Once connected, we submit all VAT returns directly from Xero to HMRC without any manual portal entry. You just need to approve the return before we click submit.

### What MTD prohibits

MTD prohibits copy-and-paste or manual re-entry of figures from one system into another. All figures in the VAT return must flow digitally from the same records in which they were originally entered. Xero satisfies this because transactions entered in Xero flow directly into the VAT return without any manual step.

💡 **Good to know:** You do not need to do anything additional to comply with MTD, beyond keeping Xero up to date. The digital record-keeping and digital submission requirements are both handled by Xero as part of normal bookkeeping.

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