The news about Making Tax Digital is not over yet. The next phase is the digital link. To ensure your business is compliant with Making Tax Digital, you must shift your accounting to compatible software.
At SCS Financial Management, this month’s blog looks at the latest Making Tax Digital guidelines from HMRC. For more information, call our experts in Reigate on 01737 373707.
The MTD Digital Link
If you use more than one piece of accounting software, a digital link provides the solution. The link comes into play when VAT data for Making Tax Digital (MTD) is transferred between one software programme to another. It also works to modify the data when moving it.
HMCR accepts the following as digital links:
- Data can be transferred electronically between systems.
- Automated data transfer between systems means you don’t require a manual upload. However, you can make adjustments once the data is in the software.
- Spreadsheets can be sent by email or portable device such as a memory pen to import into your software.
- XML or CSV import and export of data.
With the introduction of digital links, HMRC hope to reduce the risk of potential errors.
What Is Not A Digital Link?
One thing that is not considered as a digital link is to copy and paste information within software or between programmes. It can potentially cause errors and involves lots of manual work. Therefore, it is time consuming.
However, HMRC was aware that some businesses were still reliant on several different types of accounting software. Businesses were granted a soft-landing period which ended this year (April 2021), which means they were still able to use copy and paste until now.
Using copy and paste when it comes to Making Tax Digital for your VAT records now breaks the law.
What If My Digital Links Aren’t Legal?
Although most businesses comply with the MTD rules, there are still some using copy and paste for their accounting. If you require assistance, you should seek advice from our professionals at SCS Financial management or HMRC.
It is important you are compliant with the latest regulations or you could get fined. This could end up costing your business.
Contact Us
To ensure you are fully compliant with the latest Making Tax Digital guidelines, contact SCS Financial Management. We are more than happy to help. Call us on 01737 373707 or make an enquiry through our contact form.
