HMRC are providing MTD businesses with more time to put in place digital links between all parts of their functional compatible software.
We understand that, given the impact of COVID-19, HMRC are providing all Making Tax Digital (MTD) businesses with more time to put in place digital links between the programs which form part 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.
It is encouraging that HMRC have listened and taken a pragmatic approach. This is already an exceptionally difficult time for businesses without them also having to spend time and money to comply with the full digital link requirements that would otherwise, absent this extension, have applied for most businesses for returns starting on or after 1 April 2020.
Some larger more complex businesses were not mandated to apply MTD until their first return starting on or after 1 October 2019. These businesses had a digital links soft landing period until the first return starting on or after 1 October 2020 so having digital links in place across all their functional software is less urgent for them, but they will also benefit from this extension to 2021. This automatic extension means businesses struggling to get all required digital links in place will not now need to make a specific application for an extension as set out in Notice 700/22 18.104.22.168.
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