Making Tax Digital for restaurants and takeaways ​

Making Tax Digital (MTD) is HMRC’s move from paper and typed-in figures to digital records sent through software. For a restaurant or takeaway it touches two taxes. MTD for VAT already applies to every VAT-registered business. MTD for Income Tax started on 6 April 2026 for the first sole traders and landlords, and reaches more of them each April until 2028. This guide covers what each one asks of you, and what it means for the figures that come out of your till.

MTD for VAT: every VAT-registered business ​

If you are VAT-registered, you must keep your VAT records digitally and file your VAT returns through compatible software (VAT Notice 700/22, section 1.2). For each sale, the digital record includes the time of supply, its value and the rate of VAT charged, with your sales split by rate (section 3.3.2). If you use a retail scheme, you keep a digital record of your daily gross takings instead of each sale (section 3.5).

Digital links: no retyping ​

Once figures are in software, moving them to other software has to be done digitally (section 3.2.1). HMRC counts these as digital links:

• importing and exporting files such as CSV or XML,
• downloading and uploading files,
• emailing a spreadsheet that holds the records.

Copying and pasting, or typing figures from one program into another, does not count. For a restaurant that usually means one thing: the day’s takings from the till should reach your accounting software as a file or a direct import, not by someone reading the Z-report and typing the totals in.

MTD for Income Tax: sole traders, from 2026 ​

If you run your restaurant or takeaway as a sole trader, MTD for Income Tax applies once your qualifying income (from self-employment and property, before expenses) goes over a threshold (HMRC):

Qualifying income is counted before expenses, so it is closer to turnover than to profit: a takeaway can be over £50,000 long before it makes £50,000.

Once you are in, you keep digital records of your income and expenses and send HMRC a quarterly update, a summary rather than a tax return, through compatible software. The deadlines are 7 August, 7 November, 7 February and 7 May. The tax return itself is still due by 31 January after the tax year (HMRC: send quarterly updates). For the 2026 to 2027 tax year, HMRC will not give penalty points for late quarterly updates; from 6 April 2027 it will (HMRC: penalties). The next deadline, as of this guide’s date, is 7 November 2026.

Partnerships are not included yet. Limited companies pay Corporation Tax, not Income Tax on their trading profit, so MTD for Income Tax does not apply to the company itself.

What this means for your till ​

• Daily figures with VAT split by rate, in a form you can export. The Z-report is the natural daily record.
• An export your accounting software can import, so the link is digital.
• The same numbers every time. A report you can reprint for any past day and get the same totals is what you want when HMRC or your accountant asks.

How this works in Yumee POS ​

Yumee POS is not MTD software: it does not file anything with HMRC. It gives your accountant, or your accounting software, the records MTD is built on. Z-reports are numbered and locked once issued, and download as a PDF. VAT is split by rate, and the figures download for Xero, QuickBooks, Sage or FreeAgent. Sales reports and VAT figures also download as CSV or Excel whenever you want them. Filing the VAT return or the quarterly update stays with you or your accountant.

Sources ​

• HMRC, Making Tax Digital for VAT (VAT Notice 700/22): sections 1.2, 3.2.1, 3.3.2, 3.5.
• HMRC, Making Tax Digital for Income Tax Self Assessment for sole traders and landlords.
• HMRC, Use Making Tax Digital for Income Tax: send quarterly updates.
• HMRC, Penalties for Making Tax Digital for Income Tax.

This guide is general information, not tax advice. Your accountant can tell you which rules apply to your business and when.