HMRC announce process to apply for extra time to meet MTD digital links

Oct 21, 2019

In an unexpected move, last week HMRC announced that it is opening up a new process which, on application and acceptance by HMRC, will allow some businesses longer to meet the digital links requirement under Making Tax Digital for VAT, once the one year soft landing period from the original mandation date for MTD ends (either from 1 April 2020 or 1 October 2020). HMRC have also updated the relevant VAT notice.

“For periods starting on or after 1 April 2019, most VAT-registered businesses with turnover above the threshold have been required to keep their records digitally and send their VAT returns to HMRC direct from the underlying data in those digital records.  In recognition of the fact that some businesses would need more time to digitise the links between their internal systems to fully meet the requirements of Making Tax Digital (MTD), we allowed a 1 year ‘soft-landing’ period from their original mandation date for these digital links to be in place.  

Today we opened the process for customers to apply for additional time, if needed, to put digital links in place in order to comply with the requirements of MTD. This additional time will be provided for businesses with complex or legacy IT systems, who are unable to comply with MTD digital links requirements by the end of the initial soft-landing period.

Businesses need to ensure that by the end of their soft-landing period their systems are digitally linked where any data is transferred or exchanged.

Through our engagement with stakeholders we are aware that some businesses, with complex or legacy IT systems, may require a longer period to put digital links in place across their MTD software to meet their legal MTD for VAT requirements.

Therefore, we have opened a process for customers to apply for additional time. The criteria for making an application and how to apply are set out in the VAT Notice 700/22, section 4.2.1.3 - www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat.  Applications must be received by HMRC by the end of a business’ soft-landing period.”

END OF HMRC COMMUNICATION