Making Tax Digital (MTD) is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world and MTD is making fundamental changes to the way the tax system works – transforming tax administration so that it is more effective and more efficient.
End of the MTD ‘soft-landing’ period
When MTD first came into force, HMRC implemented a ‘soft-landing’ period to allow businesses to get their digital links into place. During the soft-landing period, it was acceptable to copy and paste data for your VAT return and HMRC were not issuing penalties during this period for not keeping complete digital records.
At the beginning of the pandemic, HMRC extended the soft-landing period, which was originally due to end in April 2020, to April 2021. As the soft-landing period is now over, it is key for businesses to ensure that they have adequate digital links in place to ensure compliance with MTD rules.
The essential elements of MTD are:
Timeline for MTD
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