• Farrell & Farrell

12 months deferral of UK VAT MTD “Digital links” deadline

Businesses will now be able to continue using their current ad hoc systems based on in-house Excel exports until the new tax year on 1 April 2021.


The original MTD for VAT guidance defined a digital link as an electronic or digital transfer, or exchange of data, between software programs, products or applications.


HMRC offered a soft landing period when businesses could make a manual transfer – this was set to end on either 1 April 2020 or 1 October 2020 depending on when the business first registered for MTD for VAT.


Now in light of the covid-19 pandemic, HMRC has extended the soft landing period and providing all MTD businesses with longer to put in place digital links between all parts of their functional compatible software. All businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.

Every business will still need to ensure they are keeping digital records, submitting VAT returns via an API enabled software and maintaining all digital links they may have in place already.


This announcement helps businesses focus on doing the business they can and managing the Covid-19 challenges, rather than dealing with changes to how they keep their business records.


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Farrell & Farrell CA Limited (trading as Farrell & Farrell) is registered in NI with registration number NI 639336. Registered with The Chartered Institute of Taxation as a firm of Chartered Tax Advisers. Registered to carry on audit work and regulated for a range of investment business activities by Chartered Accountants Ireland (CAI). Details about our audit registration can be viewed at www.auditregister.org.uk under reference number 3044856.