Emily Baldwin FCCA
- Outsourcing Senior Manager
- +44 (0)330 124 1399
- Email Emily[email protected]
Suggested:Result oneResult 2Result 3
Sorry, there are no results for this search.View all people
1 April 2021 marks the end of the Making Tax Digital (MTD) for VAT soft-landing period, bringing in phase 2 (that was postponed due to COVID). This will affect VAT return periods starting on or after 1 April 2021.
2019 saw Phase 1 of MTD for VAT bringing in the digital filing of VAT returns. The most important element was to ensure businesses could file the VAT returns electronically through the software package itself and a soft-landing period was given to allow time to implement digital links.
Phase 2 of MTD for VAT, which comes into effect on 1 April 2021, dictates that there now has to be digital links between all aspects of the accounting function. This means no manual keying in of data unless it is the first point of entry to the accounting system. There needs to be a clear digital link of the data from the source document all the way through to VAT submission.
You can make a formal application to HMRC for an extension to the soft-landing period, see section 18.104.22.168.
It is an electronic exchange of data between software programs, products or applications without the involvement or need for manual intervention. This can be the transfer of data within a business between two pieces of software or transfer of data to an agent in order for them to prepare and submit a VAT return.
A digital link does include linked cells within a spreadsheet e.g. a formula in one sheet that mirrors the sources value in another cell. The following are accepted digital links (this is not exhaustive):
Please note Cut/copy and paste is not a digital link.
A digital link is required between each program, product or software that is used as a functional compatible software. HMRC have outlined examples of where the digital link is required.
Some of these digital links were already mandatory in phase 1 but some weren’t due to the soft landing period. The digital links now mandatory from 1 April 2021 (this list is not exhaustive):
Want to learn more about how we can help?
Contact us to arrange to speak with one of our specialists in London, Kent and Sussex.
Share this article
Our complimentary newsletters and event invitations are designed to provide you with regular updates, insight and guidance.
You can unsubscribe from our email communications at any time by emailing [email protected] or by clicking the 'unsubscribe' link found on all our email newsletters and event invitations.