HMRC update on digital links

HMRC had announced that businesses with complex or legacy IT systems can apply for additional time beyond the current one year soft landing period to put the required digital links in place, subject to meeting certain qualifying criteria.

For VAT periods starting on or after 1 April 2020 (or 1 October 2020 for deferred businesses) a business’ systems must use digital links for any transfer or exchange of data between software.

Businesses with complex or legacy IT systems may require a longer period to put digital links in place across their functional compatible software. These businesses can apply for additional time to put the required digital links in place (subject to qualifying criteria).

If you acquire another business it may take additional time to digitally link different software applications or packages to meet MTD legal obligations. HMRC will consider specific direction applications outside of the soft landing period(s) where more time is needed to comply with digital link requirements following the purchase of another business.

The cost alone is not sufficient reason to issue a specific direction. Business are expected to make every effort to comply with the digital links requirements by the end of the soft landing period.

For more information about this subject please contact Victoria Dadswell