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News added on 23.10.2019

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MTD

More time for digital links?

The soft-landing on the requirement for businesses to use digital links under MTD for VAT ends on 1 April 2020 (or 1 October 2020 for deferred businesses). However, HMRC announced in October 2019 that businesses with complicated or legacy IT issues can apply for extra time to put digital links in place. While this is good news if you still need to manually input figures from one part of your system to another, unfortunately HMRC hasn’t made it that easy for you to apply.

How to apply. You need to make an application to HMRC as soon as possible before the end of your soft-landing period. You should e-mail mtdspecificdirections@hmrc.gov.uk for an application form; remember to include your business name and VAT number. Your application should include:

  • an explanation of why it is not possible or not reasonable to have digital links in place by the end of the soft-landing period
  • an explanation of why commercially available software does not meet the digital link requirement for your business
  • details of the systems that are unable to be digitally linked including diagrams of the existing VAT systems, highlighting the exact areas that cannot be digitally linked
  • a clear explanation and timetable for when and how the business will become fully MTD compliant
  • details of the controls the business has put in place to ensure any manually transferred data is moved accurately and without error.

Note. HMRC has said that it will not accept costs alone as a reason to allow an extension.

You can apply to postpone the April 2020 requirement to introduce digital links between accounting systems where you have complicated or legacy IT issues. But to qualify, you’ll need to explain in detail why you cannot change your systems before then.

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