Digital obligations

One of the requirements of Making Tax Digital for VAT is that businesses must keep their records so that VAT returns can be produced entirely automatically once primary information, e.g. figures from a sales invoice, has been entered into the records. This digital journey means data relevant for the VAT return must be digitally linked. This is a legal requirement.

Soft-landing period

For various reasons HMRC allowed a “soft landing” for digital linking, meaning it would not penalise businesses that failed to keep fully digitally linked records until April 2020. Because of the coronavirus pandemic the government has decided that the soft-landing period should be pushed back by a year. This means that full digital linking won’t be enforced until 1 April 2021.

Tip. If you haven’t got to grips with digital linking yet, use the extra year’s grace to get your record keeping compliant.

HMRC’s soft-landing period for digital linking of VAT records has been extended until 1 April 2021. Use the extra time to ensure that your VAT bookkeeping is compliant.

The next step

HMRC’s notice on MTD for VAT