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Making Tax Digital and digital links


By: Robert Geary Date: 8 January 2020
Category: VAT,Tax,News

When HMRC introduced Making Tax Digital (MTD) on 1 April 2019, it was agreed that if a business used more than one software accounting program, there did not have to be a digital link between the two (or more) programs until after 1 April 2020 (or 1 October 2020 for those on a delayed start for MTD).

HMRC has issued new guidance that allows complex businesses which are struggling to get the link in place to delay the “soft landing period”.

The business must take positive action and contact HMRC specifying why the deadline cannot be met. The business must:

• make a formal application to HMRC as soon as possible for an extension and by no later than the end of your soft landing period

• explain why it is unachievable and not reasonable for you to have digital links in place by the MTD VAT digital links mandation date (in April 2020 or October 2020, for businesses mandated to join MTD in 2019) for example, why does commercially available software not meet the digital link requirement for your business?

• submit details of the systems that are unable to be digitally linked (provide a current map of your existing VAT systems, highlighting the exact areas that cannot be digitally linked)

• provide a clear explanation and timetable for when and how you will become fully MTD compliant (ordinarily no later than one year from the end of their soft landing period)

• state the controls you will put in place to ensure any manually transferred data is moved accurately and without error

If you would like to discuss further please contact us.
 
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