Regarding Making Tax Digital (MTD), what is meant by functional compatible software? If my turnover is below £85,000, when will I be expected to submit my VAT returns digitally?

This has become an increasingly common question of late and HMRC did confirm in November 2020 that VAT-registered businesses with a taxable turnover below £85,000 will be required to follow Making Tax Digital rules from their first return starting on or after 1 April 2022.

This can appear to be a daunting task for small businesses where time and money is always at a premium but here I summarise the main points to make it less daunting than it appears.