In light of the Covid-19 pandemic presenting unprecedented challenges for everyone, HMRC has announced a one year deferment to the requirement to digitally link separate software programmes when preparing your VAT return. The soft landing period of MTD (Making Tax Digital) had originally been in place for businesses to make a manual transfer – this was set on either 1 April 2020 or 1 October 2020, depending when they first registered for MTD for VAT.
The original MTD for VAT guidance defined a digital link as an electronic or digital transfer, or exchange of data, between software programmes, products or applications.
Businesses are now able to use their current systems including using excel reports until the new tax year on 1 April 2021 when digital links will need to be put in place. This will enable businesses to focus on managing the challenges that Covid-19 has presented, rather than dealing with the changes in keeping their business records.
Each business will need to ensure records are kept digitally, submit VAT returns and maintain all digital links already in place, where possible.
HMRC will update VAT Notice 700/22 Making Tax Digital for VAT as soon as possible to reflect this change.
If you need further information or would like to talk this through please get in touch with your usual Whiting & Partners contact.
Disclaimer - All information in this post was correct at time of writing.