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MTD for VAT – possible extension of the soft-landing period for digital links

The ‘soft-landing’ on the requirement for businesses to use digital links under making tax digital ends on 1 April 2020 or 1 October 2020 for deferred businesses. However, HMRC has announced today that businesses with complex systems can apply for additional time to put digital links in place.

To apply for an extension to the soft landing period businesses will be required to make a formal application to HMRC as soon as possible before the end of your soft landing period.

The 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

HMRC have said that they will not accept costs alone as a reason to allow an extension.

Businesses should make every effort to comply with the MTD requirements by the end of the soft landing period and extensions to the soft landing period will only be allowed in exceptional circumstances.

As always we are here to help, please get in touch with me becky.hayes@pkf-francisclark.co.uk or 01392 667000, or any of my VAT colleagues if you have any questions.

FEATURING: Becky Hayes
Becky advises family business, companies and individuals on a broad range of VAT and SDLT matters. Becky’s particular specialisms include land and property, company reconstructions… read more
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