Making Tax Digital Updated VAT Notice published.

HMRC has published an updated version of VAT Notice 700/22: Making Tax Digital for VAT. This includes updates on digital record keeping requirements.  

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Linda Skilbeck

+44 (0)20 8037 3114

The notice confirms that ‘the soft landing period’ (the period of time allowed for organisations to have digital links in place between all parts of their functional compatible software) is to be extended to 12 months after the mandated start date. The extension should be a welcome relief to many organisations who are fearful that they won't be able to comply within the time frame or feel rushed into picking a software provider and want more time for testing. 

In practice, this means that businesses or charities who have a deferred start date of 1 October 2019, such as VAT groups, will not have to implement full digital links at the back-end of their VAT processes until October 2020. This is six months later than the original April 2020 implementation date, giving more time to test processes and review the software available from third party providers.

Those with a mandated start of April 2019 will still need to have digital links implemented by April 2020. In short, this means that organisations cannot ‘cut and paste’ information from one software programme to another, or note down invoice details by hand and use this to manually update different parts of the system. However HMRC say that linked cells in spreadsheets, for example, if you have a formula in one sheet that mirrors the source’s value in another cell, is a digital link. And the transferring of such spreadsheets via email, memory stick or flash drive in such a way which enables an agent to ‘import’ the data into their own software will also constitute a digital link.

Buzzacott’s very own HMRC approved MTD compliant bridging solution is now listed on HMRC’s website. This cloud-based solution will be easy to use, competitively priced and will enable organisations to meet the demands of MTD in order to submit their UK VAT returns after the April 2019 deadline. In addition, the system allows organisations to keep track of returns previously submitted and perform certain validation checks on VAT returns prior to submission.

View the full version of the updated VAT Notice 700/22: Making Tax Digital for VAT here.

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