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Happy 1st Birthday Making Tax Digital for VAT… but will you be celebrating as the “Soft Landing” comes to an end?

It was in April 2019 that HMRC implemented the new Making Tax Digital for VAT regulations.

It required a “digital” connection between your Finance software and HMRC.  The intention was to streamline submissions whilst reducing manual intervention (resulting in fewer errors) on your VAT return.

Arguably the timescales were a little tight and HMRC decided to put in a place a “soft landing period”.

Soft Landing regarding digital link requirements.

The “soft landing period” given by HMRC meant that businesses had more time to put digital links in place between all of their functional compatible software.

As stated on the HMRC website:

“For the first year of mandation businesses will not be required to have digital links between software programs.

This means that if Making Tax Digital rules first apply to you from a:

  • VAT period starting on or after 1 April 2019 – you will have until your first VAT return period starting on or after 1 April 2020 to put digital links in place
  • VAT period starting on or after 1 October 2019 – you will have until your first VAT return period starting on or after 1 October 2020 to put digital links in place

During the soft landing period only, where a digital link has not been established between software programs, HMRC will accept the use of ‘cut and paste’ or ‘copy and paste’ as being a digital link for these VAT periods.”

(HMRC, 2019)

Are you ready for the end of the “soft landing period”?  Are you still “cutting and pasting” or manually inputting values?  If so then you’re running out of time.

You can apply for a further extension and the link below explain how, but don’t get caught out.  For further information on all things MTD for VAT submissions speak to your Agent, Accountant or check out Section 4.2 of HMRC’s guidelines to ensure you are MTD compliant.

https://www.gov.uk/government/publications/vat-notice-70022-making-tax-digital-for-vat/vat-notice-70022-making-tax-digital-for-vat

Happy Birthday Making Tax Digital for VAT!

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