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MTD for VAT - Mandatory Digital Links
MTD for VAT - Mandatory Digital Links


When filing business VAT Returns to HMRC under the MTD for VAT regime, it is now mandatory (as of 1st April 2021) to have digital links in place.

If you have not managed to make this transition yet, there is no need to panic, since it is highly likely that you already have the means to continue being compliant. It may be a simple case of making some small adjustments.

This blog post is designed to help you get your head around these changes.



What is a digital link?


Once transactional data is entered into a software package or spreadsheet, any further transfer or modification of that data must be made without manual intervention.

This means that, if the data needs to be transferred to a different software package, it has to be done without copying/pasting or retyping.

The software used must be linked digitally. This applies to transferring data between, for example, a spreadsheet and a bridging solution to file the return to HMRC.

What HMRC considers and accepts as a digital link is surprisingly inclusive. Examples include:


  1. Linked cells, for example, a formula in one sheet that mirrors the source’s value in another cell/sheet.
  2. Emailing a spreadsheet for information to be imported into another software product.
  3. Transferring a set of digital records onto a portable device (for example, a pen drive, memory stick, flash drive) and physically giving this to someone else who then imports that data into their software.
  4. XML, CSV import and export, and download and upload of files.
  5. API (Application Programming Interface) transfer – this is the technology used for systems to directly link and transfer data.



What if you use more than one piece of software?


As long as digital links are in place, a business can use as many software applications desired to meet the requirements of MTD for VAT.

So, if you have a bespoke bookkeeping package that is not enabled for online filing to HMRC, you can continue using this application – as long as you can meet the digital links requirements.

For example, by exporting the values from your bespoke package into a CSV file and then using bridging software to import those values and submit to HMRC.



Can you continue to use spreadsheets for record keeping under MTD for VAT?


Yes, spreadsheets are classed as software under Making Tax Digital. Many businesses have very simple record keeping requirements and will not need to use bookkeeping packages to meet their needs.

Spreadsheets can provide nice simple methods of recording your transactions and continue to meet the requirements of MTD.



What information should my record keeping spreadsheet include?


When using spreadsheets to collate VAT transactions, the link between the transactions totals and the total amounts to be reported in boxes 1 to 9 are now required to be digital, with no manual intervention (such as cut and paste).

This means you need to ensure that the relevant VAT totals are present for transfer to the bridging software.


If you require a more extensive breakdown of the changes, you can find this on the government website



Contact Gow & Partners for Help


Our dedicated team of accountants would be more than happy to undertake this transition on your behalf, alleviating the burden of implementing mandatory digital links.

If this help is something that your business require, simply call 01254 589799 today! Alternatively, you can fill in a contact form, or send us an email at info@gowandpartners.co.uk.