MTD ‘digital links’ Deadline Deferred

For VAT registered businesses, the deadline for businesses reporting under Making Tax Digital (MTD) for VAT to meet the requirement to have ‘digital links’ has been deferred by one year until 1 April 2021.

A digital link was defined by HMRC as an electronic or digital transfer, or exchange of data, between software programs, products or applications. The use of ‘cut and paste’ or ‘copy and paste’ as a way of transferring information was specifically excluded, with the exception of during the first year of operation.

HMRC had allowed a soft landing period when businesses could make a manual transfer. This was set to end on either 1 April 2020 or 1 October 2020 depending on when your business first registered for MTD for VAT.

However, in light of Covid-19 HMRC have said that they understand these are difficult times for all and they are committed to helping in every way possible. Therefore they have extended the soft landing period until 1 April 2021. This means that businesses will now be able to continue using their current systems based on in-house Excel exports until this date.

Every business registered for MTD will still need to ensure they are keeping digital records, submitting VAT returns via an API enabled software and maintaining all digital links they may have in place already.