Making tax digital for VAT changes delayed

With only days to go before the deadline, HMRC has postponed a requirement for businesses registered under Making Tax Digital (MTD) for VAT, to use ‘digital links’ in transferring data from Excel or other sources for their online reporting. Originally due to come in from 1 April, the deferral is seen as easing pressure on businesses already struggling in the wake of Covid-19.

Defined as an electronic transfer or exchange of information between software products or applications, digital links specifically excluded use of ‘cut and paste’ methods except during the initial transition year. The soft landing period for such transitions was due to end either on 1 April or 1 October 2020, depending on when the business first registered for MTD for VAT.

Business will now have until their first VAT return period starting from 1 April 2021 to implement digital links fully.

HMRC said:

"We understand that the impact of COVID-19 is creating extremely difficult times for all, and we are committed to helping in every way possible all those businesses facing unprecedented challenges. Therefore, we are providing all MTD businesses with more time to put in place digital links between all parts of their functional compatible software. This means that all businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place."