A new announcement from HMRC on the final MTD for VAT link…
The digital links requirement of Making Tax Digital for VAT has been extended to the end of the first VAT return after 1 April 2021, in response to the COVID-19 outbreak. HMRC stated ‘’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 is the final link to the MTD that started last April. Initially, all businesses were given a 12-month timeline and a 'soft landing' to ensure all digital links were in place.
In ‘phase one’ of MTD for VAT, businesses were required to sign up to submit their VAT returns electronically to HMRC directly from their software. For ‘phase two’ businesses are required to digitally link their software from entry to each transaction at one end of the process, through to submission of the VAT return at the other. This was irrespective of how many pieces of software were used to achieve this process.
That all means the requirement to digitally link separate software programmes in the VAT return ‘journey’ has been put on hold for a year.
